Weekly Briefing No. 76 | FinTech Sandbox Special Edition

Even financial revolutionists need a break now again. As such, we are taking a respite from our current format to bring you a special edition (our 76th no less) to highlight FinTech Sandbox. The FR is proud to be a sponsor of its upcoming Demo Day on April 20th that will take place at Fidelity’s office in Boston. In the meantime, here’s what’s on our Sam Adams tap:

  • FinTech Sandbox: Who are these Beantowners?
  • A follow-up with John Fawcett, Quantopian’s chief and FinTech Sandbox executive board member
  • The new revolutionaries

IN DEPTH

Who are these FinTech Sandbox Beantowners?

It’s usually best for people from Boston and New York to avoid talk of Tom Brady’s dominance or Bill Buckner’s fielding.  But when it comes to financial innovation, we think that it’s important for New Yorkers to do an east coast slide north. Launched in 2015 by a host of big names including Fidelity, Thomson Reuters and Amazon, FinTech Sandbox has become the epicenter of Boston’s financial innovation ecosystem, supporting 65 start-ups from around the world with data, guidance and entrée to its 2,200+ strong community. Companies including Quantopian (see below) and Kensho have emerged as star start-ups from its accelerator program, but it’s not solely focused on serving the institutional buy side. In fact, nearly 35% of FinTech Sandbox companies are focused on consumer facing products involved in payments, lending and personal finance to name a few. That diversity is likely to grow in time as the powerhouse universities in Boston produce more researchers and graduates who are captivated by the intersection of finance and technology.

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Fawce follow-up.

Last December, we interviewed Quantopian’s CEO John Fawcett (a.k.a. “Fawce”) at a Boston coffee shop (see attached). Since then, a few other visible start-ups have also built momentum in questioning the framework and incentive system of a regular-way quant fund. Some leading quant funds, meanwhile, have launched strategic partnerships and/or their own algo contests to amp-up their competitive positioning. In a recent follow-up with Fawce, The FR’s Gregg Schoenberg asked him how he feels about Quantopian’s competitive stance now, particularly on the heels of the company’s recent announcement that it has been making sizable allocations to members of its community. In a nutshell, Fawce remains confident that he can keep the talent flowing his way. Still, Fawce realizes that the war for data science stars continues to heat-up, acknowledging that he’s keeping a close eye on Google and Facebook in particular. He’s also moving into a new asset class. “Our next big market is US futures,” says Fawce, adding that the company is focused on offering high-powered tools, lectures and workshops to help its community build more expertise in quant futures.

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DEMO DAY REVOLUTIONARIES

Tom Scholz is an inventor who graduated from MIT’s prestigious engineering program. However, his claim to fame is founding the rock group Boston. Perhaps there are a few more rock stars that will emerge from these upcoming presenters:

Alpaca (San Mateo)

The company is predicated on the desire for sophisticated individual traders to have professional grade tools at their disposal. The heart of that tool kit is a database. In this case, the database is a proprietary one named MarketStore, which utilizes advanced hardware, software and AI technologies usually reserved for institutional professionals.

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Elsen (Boston)

Last week’s Company of Note, Elsen has built a platform-as-a-service offering to help asset managers solve their most complicated data challenges regardless of their technical expertise. That platform relies on “massively-parallel processing” to run faster models with more speed and lower server costs.

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FutureFuel (Boston)

FutureFuel has created a platform that brings employers and employees together on the massive/scary issue of student debt. The proposition to companies is that by partnering with employees to help them pay down their student loans, they can improve recruitment and retention levels. This kind of partnership, in turn, adds productivity and lowers recruitment expenses for the employers.

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Stessa (San Francisco)

The company was born from the realization that property owners should be able to manage their investments with the same set of tools that many people use to manage their equity portfolio. Those tools include dashboard reporting, real-time data analytics and automation, all of which seek to provide clients with more insights into the value and changing dynamics of their real estate portfolios.

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TellusLabs (Boston)

A former Company of Note, TellusLabs is an analytics startup focused on the potential associated with the massive stockpile of so-called “stranded” Earth data. That data can serve as the basis for better decision making in sectors like agricultural commodities, where transparency into supply-side information has remained largely unchanged for decades.

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Vetr (New York)

Vetr is an investment research platform that provides clients with crowdsourced wisdom on equities and ETFs. For that reason, it has been called the Yelp for stocks. However, in addition to its proprietary star ratings (members are weighted on accuracy), the company also delivers personalized insights and alerts that can facilitate more informed investment decisions.

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Virtual Cove (Boston)

Virtual Cove sits at the intersection of virtual/augmented reality and finance. Its core technology transforms discrete and time series data into visualizations that can enable quantitative traders, analysts and portfolio managers to detect anomalies with greater speed and efficiency than a computer can do alone. Hear that? This company believes that humans plus machines are better than machines alone.

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Quote of the Week

“The stock market has forecast nine of the last five recessions.”

~ Paul Samuelson