Milwaukee FinTech firms aim to help consumers

Startup Milwaukee event highlights efforts [PHOTO GALLERY]

More than 100 people crowded into Hoffman York’s headquarters in Milwaukee’s Historic Third Ward this morning to hear about local financial technology startup companies.

The event, which attracted both entrepreneurs and investors, was hosted by Startup Milwaukee as part of its Emerge series.

“We think that Milwaukee has an opportunity to be an epicenter in FinTech,” said Matthew Yerkes, financial advisor at RBC Wealth Management, one of Emerge’s organizers.

Among the speakers was Craig Schedler, venture partner at Northwestern Mutual Future Ventures, which seeks to invest in companies like the startups who made their pitches at the event.

This slideshow requires JavaScript.

The pace of FinTech disruption is increasing in the financial industry, with about $22 billion raised by FinTech startups over the past five years, Schedler said.

“What’s driving this change? I think those of you in the financial technology industry would say changing consumer expectations,” he said. “These FinTech startups take a very client-centric approach. Having that external perspective is invaluable to any incumbent.”

Northwestern Mutual has invested in two key early FinTech leaders, Betterment and Learnvest. And with its Future Ventures program, it plans to invest $50 million in series A and series B funding rounds over the next five to six years to bring in more partnership opportunities.

“We want to be more than just a source of capital and really help a business grow,” Schedler said. “Our preference is generally to co-invest along with leading VCs.”

Michael Adam, founder and chief executive officer of Whitefish Bay-based Bank My Biz LLC, discussed his company’s transformation from a matchmaker for businesses and lenders, to a lender itself.

“We partner with banks all over the country and we become their third-party small business loan lender,” Adam said.

Bank My Biz has 13 bank partners in Wisconsin and many more across the country, he said. So if one of those banks isn’t able to extend an equipment or working capital loan of less than $100,000 to a small business, Bank My Biz may be able to do so with its financial partner, Brookfield-based national direct lender Advantage+.

Advantage owns about 30 percent of Bank My Biz, and the organizations specialize in micro-lending. Bank My Biz underwrites loan application the same day using an automated system.

Banks earn income off the term loan and Bank My Biz earns its revenue through the interest rate spread. It charges interest rates of between 9 and 13 percent.

And separate from Bank My Biz, Adam also recently founded another company, Doc Launch, that will introduce its software program this summer.

“It’s the world’s first software platform to allow financial service companies…to manage and send their documents, using our smart contracts, to their customers,” he said.

Doc Launch will be set up to provide reminders and auto-trigger payment systems once documents are signed.

Andy Siefkes of Whitefish Bay-based Looking Glass Investments made the case for automated underwriting.

“The amount of time and math and research that we’ve put into our model that allows it to be what it is today, that allows us that speed (of underwriting),” Siefkes said. “We don’t lend to people with bad credit. We don’t do subprime lending.”

Looking Glass buys marketplace loans on lending sites Funding Circle, LendingClub, Peerform and Prosper. Using its custom predictive analytics software, LGI evaluates and underwrites loans it has determined are unlikely to default. The alternative investment model promises investors a less volatile environment than the equity markets.

It also runs LoansOfTheDay.com, which uses big data, predictive analytics, artificial intelligence and machine learning to distribute risk and optimize returns on peer-to-peer lending sites. LGI contributes a minimum of $25 to each loan on the site

And its newest product is LendSight, a SaaS underwriting tool banks can use to improve their profit margins by doing predictive underwriting, while allowing Looking Glass to capture more market share, Siefkes said.

And Craig Sweeney of Delafield-based Shift Savings introduced his startup, Shift Savings, to the group. It was formerly known as Milo Savings.

Shift Savings is an employee benefit program that allows employers to attract and retain great talent by providing employees with a financial saving tool and employer match. Employers pay a monthly subscription fee, while individuals pay $1 per month plus a percentage of assets under management.

Employees can contribute a percentage of each paycheck to the savings plan and receive tips on daily opportunities to save money.

“We’re kind of looking at this as a bridge that allows (employees) to feel more comfortable and start financially investing in their future,” Sweeney said.

There are four southeastern Wisconsin employers now offering Shift Savings to their workforce. On average, users save about $700 per year, plus the employer match.

More than 100 people crowded into Hoffman York’s headquarters in Milwaukee’s Historic Third Ward this morning to hear about local financial technology startup companies.

The event, which attracted both entrepreneurs and investors, was hosted by Startup Milwaukee as part of its Emerge series.

“We think that Milwaukee has an opportunity to be an epicenter in FinTech,” said Matthew Yerkes, financial advisor at RBC Wealth Management, one of Emerge’s organizers.

Among the speakers was Craig Schedler, venture partner at Northwestern Mutual Future Ventures, which seeks to invest in companies like the startups who made their pitches at the event.

This slideshow requires JavaScript.

The pace of FinTech disruption is increasing in the financial industry, with about $22 billion raised by FinTech startups over the past five years, Schedler said.

“What’s driving this change? I think those of you in the financial technology industry would say changing consumer expectations,” he said. “These FinTech startups take a very client-centric approach. Having that external perspective is invaluable to any incumbent.”

Northwestern Mutual has invested in two key early FinTech leaders, Betterment and Learnvest. And with its Future Ventures program, it plans to invest $50 million in series A and series B funding rounds over the next five to six years to bring in more partnership opportunities.

“We want to be more than just a source of capital and really help a business grow,” Schedler said. “Our preference is generally to co-invest along with leading VCs.”

Michael Adam, founder and chief executive officer of Whitefish Bay-based Bank My Biz LLC, discussed his company’s transformation from a matchmaker for businesses and lenders, to a lender itself.

“We partner with banks all over the country and we become their third-party small business loan lender,” Adam said.

Bank My Biz has 13 bank partners in Wisconsin and many more across the country, he said. So if one of those banks isn’t able to extend an equipment or working capital loan of less than $100,000 to a small business, Bank My Biz may be able to do so with its financial partner, Brookfield-based national direct lender Advantage+.

Advantage owns about 30 percent of Bank My Biz, and the organizations specialize in micro-lending. Bank My Biz underwrites loan application the same day using an automated system.

Banks earn income off the term loan and Bank My Biz earns its revenue through the interest rate spread. It charges interest rates of between 9 and 13 percent.

And separate from Bank My Biz, Adam also recently founded another company, Doc Launch, that will introduce its software program this summer.

“It’s the world’s first software platform to allow financial service companies…to manage and send their documents, using our smart contracts, to their customers,” he said.

Doc Launch will be set up to provide reminders and auto-trigger payment systems once documents are signed.

Andy Siefkes of Whitefish Bay-based Looking Glass Investments made the case for automated underwriting.

“The amount of time and math and research that we’ve put into our model that allows it to be what it is today, that allows us that speed (of underwriting),” Siefkes said. “We don’t lend to people with bad credit. We don’t do subprime lending.”

Looking Glass buys marketplace loans on lending sites Funding Circle, LendingClub, Peerform and Prosper. Using its custom predictive analytics software, LGI evaluates and underwrites loans it has determined are unlikely to default. The alternative investment model promises investors a less volatile environment than the equity markets.

It also runs LoansOfTheDay.com, which uses big data, predictive analytics, artificial intelligence and machine learning to distribute risk and optimize returns on peer-to-peer lending sites. LGI contributes a minimum of $25 to each loan on the site

And its newest product is LendSight, a SaaS underwriting tool banks can use to improve their profit margins by doing predictive underwriting, while allowing Looking Glass to capture more market share, Siefkes said.

And Craig Sweeney of Delafield-based Shift Savings introduced his startup, Shift Savings, to the group. It was formerly known as Milo Savings.

Shift Savings is an employee benefit program that allows employers to attract and retain great talent by providing employees with a financial saving tool and employer match. Employers pay a monthly subscription fee, while individuals pay $1 per month plus a percentage of assets under management.

Employees can contribute a percentage of each paycheck to the savings plan and receive tips on daily opportunities to save money.

“We’re kind of looking at this as a bridge that allows (employees) to feel more comfortable and start financially investing in their future,” Sweeney said.

There are four southeastern Wisconsin employers now offering Shift Savings to their workforce. On average, users save about $700 per year, plus the employer match.

Comments