Financial technology companies in the early stages of funding and development have a new source of seed investment and mentoring in St. Louis.
A group of entrepreneurs and business leaders launched an accelerator program, SixThirty, this week to help grow one of St. Louis’ largest industries — financial services. The group’s name is a nod to the height and width of one of St. Louis’ most recognizable landmarks, the Gateway Arch.
Early stage companies can apply for four spots in the accelerator’s inaugural four-month program that will be housed in the Regional Entrepreneur Exchange (T-REx) startup co-working space downtown. The companies will receive $100,000 each, funded by St. Louis-based investment firm Cultivation Capital and the St. Louis Regional Chamber.
Eight companies a year for the next three years will be able to tap into the funding and receive free legal services and discounted software and Web hosting.
But an even more critical part of the accelerator, according to its backers, is the access to some of the country’s largest financial services firms. The St. Louis region is home to some of the largest financial services companies in the country, including Edward Jones, Wells Fargo Advisors, Stifel Financial Corp., Scottrade, U.S. Bancorp Community Development Corp. and CitiMortgage. Financial services firms in the region employ 85,000 people and areas such as securities industry employment here are growing rapidly.
SixThirty has had preliminary discussions with some of the firms to provide SixThirty companies mentoring, training and networking opportunities.
“We have an exceptional number of financial services firms here,” said Jim McKelvey, SixThirty’s managing director and co-founder of Square, a device that plugs into a smartphone or iPad and processes credit card payments. “There’s an opportunity to create something that couldn’t be created in other cities,” he continued. “We’re doubling down on the strengths that we have.”
All startups need a great product, a good team and funding, but financial tech startups need another element to be successful, McKelvey contends.
“What they need are relationships and access because if you don’t have the right relationships, you can still fail,” he said in an interview.
Since launching Tuesday, the accelerator has already received multiple applications on its website, sixthirty.co. Applications for the first round are due Aug. 30, with the program running from Oct. 7 through Feb. 14. The next round will be held sometime early next spring.
At the end of the program, the startups will be offered the chance to give a presentation on their companies in front of a panel of information technology and financial services company representatives.
The St. Louis Regional Chamber sees SixThirty as an opportunity to foster the growth of new companies and to help existing financial services companies here tap into emerging technologies to build their businesses.
Last year, the chamber formed the Greater St. Louis Financial Forum to position St. Louis as a leading off-Wall Street financial center by attracting companies here and growing existing companies.
Dozens of top executives from financial services firms throughout the region are members of the forum, which also has the mission of supporting startups, said Danny Ludeman, president and CEO of brokerage and investment firm Wells Fargo Advisors and chairman of the chamber’s executive committee.
“St. Louis is developing a tremendous amount of momentum for being viewed from around the country as a city and as a region with a lot of startups,” Ludeman told the Post-Dispatch. “The primary interest in SixThirty is looking at the St. Louis community and providing an environment where startups feel like they’re getting support and building a reputation where people can not only start companies but grow them successfully.”
SixThirty participants will have access to members of the forum to help resolve industry challenges and forum companies will get the first look at new technologies.
“It’s very symbiotic,” said Jay De Long, the chamber’s vice president of new ventures and capital formation. “Both the financial forum and SixThirty are efforts to leverage the strengths that we have for greater economic development.”
The idea for SixThirty gained momentum in March at the South by Southwest Music and Media Conference in Austin, which attracts tech firms from around the world.
A group of St. Louisans, including De Long and McKelvey, discussed the accelerator there, modeling it after a seed stage startup accelerator in Cincinnati, Brandery. Brandery is centered around Cincinnati’s consumer products marketing industry expertise, with Fortune 500 companies Procter & Gamble, Kroger, and Macy’s based there.
A goal of SixThirty is to attract entrepreneurs from both inside and outside the St. Louis region.
“It works great for local startups and to attract startups that are in environments that are not as conducive to success in the financial services space,” De Long said.