Which City Is the Next Big Fintech Hub? New York Stakes Its Claim

By Crosman, Penny | American Banker, June 30, 2014 | Go to article overview

Which City Is the Next Big Fintech Hub? New York Stakes Its Claim


Crosman, Penny, American Banker


Byline: Penny Crosman

A friendly rivalry seems to be bubbling up between New York and London over which is the world's next big financial technology hub.

Accenture and the Partnership Fund for New York City, an investment fund that supports New York-based entrepreneurs, released a study Thursday detailing how the city is emerging as a hotbed of investment in financial technology firms.

"Fintech investment in New York has grown at more than twice the rate of Silicon Valley," Maria Gotsch, the president and chief executive of the Partnership Fund, said at an innovation conference in New York Thursday.

Silicon Valley is still the largest recipient of fintech investment, the study acknowledges, but it is facing growing competition from New York -- or Silicon Alley as some call it. New York had a third as many fintech investment deals as Silicon Valley in 2011, two-thirds as many in 2013 and a near-equal number in the first quarter of 2014. (Seventeen investment deals had closed in New York as of March 31 versus 19 in Silicon Valley.)

Between 2008 and 2013, New York reaped $1.1 billion in fintech investment, including $430 million last year, making it the world's second largest fintech center, according to the study. LearnVest, for instance, a personal finance platform founded by a former Morgan Stanley trader, received $28 million in venture capital this April. Online lending startup OnDeck recently secured $77 million.

"Unlike Silicon Valley, New York offers proximity to a huge potential customer base of financial institutions and a vast existing financial technology workforce, in addition to its burgeoning venture ecosystem," stated the report, which was released at the FinTech Innovation Lab Demo Day co-hosted by Accenture and the Partnership Fund. "This makes the city a natural contender to be a world leading fintech capital, bringing new jobs and capital to New York and helping to secure the long-term competitiveness of the U.S. financial services industry."

But New York fintech boosters need to keep a wary eye on London -- sometimes called Fintech City -- which makes a similar claim to fintech supremacy.

A London blog called City A. …

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