Today, Toronto’s DMZ announced that it is partnering with BMO to launch a FinTech accelerator.
The DMZ-BMO FinTech accelerator is an extension of the organizations’ Next Big Idea in FinTech competition launched a year ago. During that competition, startups worked for four months out of the DMZ, which culminated in a $25,000 competition.
The accelerator will operate in the same way as the NBIF competition, and includes a four-month incubation period with six entrepreneurs, mentorship from BMO leaders, and a culminating event where each finalist will pitch their technology to a panel of BMO experts.
By partnering together we can make banks more effective in delivering solutions to clients they want quicker, and potentially cheaper.
FormHero, which took third place in the NBIF competition in 2016, has since gone through a proof of concept of its technology, which automatically finds and fills out the right documents and replaces the PDF process. That technology is now live on the BMO website.
“Working with BMO has helped us grow our team and our customer base,” said Art Harrison, co-founder of FormHero. “We’ve also been able to expand our lines of business with BMO across multiple areas of the bank.”
For both the DMZ and BMO, the expansion to an accelerator is driven by a shift in the needs of startups, enterprises, and the larger FinTech ecosystem.
“What I hear a lot from early-stage companies is that they can actually get money. Money is getting easier to come by, Canada has an increasing number of venture capital organizations, private equity. It’s less about money now, and what early stage companies need more than ever are blue chip clients, because that gives them the right respectability to scale their business,” said Andrew Irvine, head of Canadian Business Banking and BMO Partners.
DMZ executive director Abdullah Snobar says that for the DMZ, it’s about doubling down on certain sectors, and moving beyond just being a space for startups.
“We’re at a stage where we’re now maturing, [and] after seven years we believe that this is a way forward. It’s beyond just making the DMZ great, it’s also making the city of Toronto great,” said Snobar. “The beauty of working with BMO is that it’s a Canadian bank. They also have an international footprint, which every single one of our startups coming into the DMZ have to have — that international mindset and the ability to take its scale to companies globally.”
Startups accepted into the accelerator should have the same criteria as the DMZ — having a tech-based product in market and early revenue. But Snobar indicates that the DMZ is most interest in startups with the most potential to scale.
“We’re not limiting ourselves to one sector; as a matter of fact, our value proposition will always be around scale and growth,” said Snobar. “We are a world-class incubator and accelerator focusing on scale and growth — whether it’s going to be in insurance, whether it’s going to be in sales, FinTech, or big data; the common denominator across the board is sales and scale.”
While Irvine describes the DMZ as a strong partner thanks its effectiveness in attracting tech companies, he adds that the partnership speaks to a larger trend of FinTechs in Canada. Rather than focusing on disrupting bank services, startups are looking at banks as customers, consumer acquisition tools, and a guide to navigating Canada’s strict regulatory environment.
“That’s the new mantra — that by partnering together we can make banks more effective in delivering solutions to clients they want quicker, and potentially cheaper, and we are a great source of clients and buyers of FinTech solutions of the startup community,” said Irvine. “As we build this ecosystem, i think Canada and the Waterloo-Toronto corridor is going to be a rich cluster that is going to attract more activity, and that’s good for Canada.”
Applications to the DMZ-BMO Fintech Accelerator program are due by June 25.