What do Singapore, Bahrain, and Detroit have in common? If you answered “they’re all home to financial technology hubs,” you win a prize.
Singapore is a well-known global finance capital, while Bahrain has spent the past four decades positioning itself as one of the Middle East’s bastions of commerce and entrepreneurship. Detroit is perhaps the surprise here. Although the city is transforming, it’s not exactly known as a beacon of financial health, especially considering it just emerged from 2013’s municipal bankruptcy earlier this year.
And that might be exactly why the FinTech Consortium, a privately owned international firm engaged in ecosystem-building as well as incubating and funding financial tech companies, chose the Motor City as the location for its first North American hub—joining its other two outposts in Bahrain and Singapore.
“We wanted to go where we could make the most impact,” Maissan Almaskati, managing partner at the FinTech Consortium, explains. “Detroit has a lot of corporate talent and all the raw ingredients for innovation.” New York and Chicago may be considered traditional centers of corporate finance, but Almaskati says fintech calls for a more disruptive approach. “Innovation doesn’t need to come from the traditional places,” he adds. “It’s better if it comes from outside.”
It also helped that, as a metro Detroit resident, Almaskati had local insight into the city’s revitalization efforts. “I had been pushing quite hard for Detroit,” he says. “I found things already taking shape, like the Detroit Fintech Challenge, that encouraged us.”
With all that in mind, the FinTech Consortium this week announced plans to establish the Detroit FinTech Bay, a co-working hub and incubator intended to advance the development of startups in the sector, as well as spur cross-pollination between investors, entrepreneurs, government bodies, and financial institutions.
Setting up shop in a renovated former bank building downtown, the Detroit FinTech Bay will be overseen by Rick Frisbie, an industry vet who served as chairman of RobustWealth, a robo-advisory fintech startup that was acquired in June by Principal Financial Group. Before that, he spent 20 years in a variety of senior executive positions at investment firm Franklin Templeton.
Almaskati says the Detroit hub will follow a model in which tenants pay a fee to use the space, with options that range from a one-day pass to a private corner office. (The website doesn’t yet list pricing details.) In exchange, startup tenants get access to the consortium’s network, investors, and mentors, and corporate tenants get an opportunity to preview or even acquire the latest fintech innovations they need to stay competitive. He says the hub will also offer leadership courses, monthly classes and activities, hackathons, demo days, pitch coaching, and more.
“Our model is built on collaboration,” he says. “We need Michigan financial institutions to be our partners—we can’t work in isolation. At the same time, we want innovators to see the Detroit FinTech Bay as a platform to showcase their solutions and startups.” The ultimate goal, he maintains, is to bring people together to foster creativity and growth for all involved.
The Detroit FinTech Bay doesn’t require any equity from startup tenants, but Almaskati says it has an investment fund “that operates in parallel” to support the startups it considers most promising.
The consortium’s 20,000-square-foot space is currently undergoing renovations and is scheduled to open in early 2019. Almaskati hopes to hire up to eight people to help manage the hub, and by the end of the first year, he’d like to see it fully occupied.
“I want the Detroit FinTech Bay to become a voice for the industry,” he says. “Anyone with a stake in fintech can come here and make their voice heard.”