How New York City is Nurturing a New Generation of Financial Innovation

The opinions expressed in this article are the author’s own and do not necessarily reflect the views or position of Startup Genome.

New York City has long cemented its status as home to the world’s most influential financial institutions, and it’s quickly confirming its place as a Fintech leader. When Andreeseen Horowitz announced that it was opening a new office in the city in late 2021, the leading investment firm stated “New York has long been the financial capital of the world, and there’s no question it will become the fintech capital too.”

The breadth of the sector is represented by a swell of companies that have completed IPOs or reached unicorn status in recent years — startups building the future of mobile banking, insurance, wealth and asset management, and more. Among them are insurance startup Lemonade and personal finance app MoneyLion, both of which went public in 2021. Blockchain security company Chainalysis and corporate card and finance automation platform Ramp are each valued at approximately $4 billion.

In total, more than 1,000 Fintech startups call New York City home, at least 20 of which have reached unicorn status. Some of the most rapid growth has come from Cryptocurrency and Blockchain companies, whose number increased a whopping 106% (up to 338 from 110) since 2016.

Supporting the Next Generation of Financial Innovation

Its Wall Street legacy and long-standing status as a financial hub have helped New York City become the most attractive place for early-stage entrepreneurs to build their Fintech startups. Well-established financial institutions are an active part of the ecosystem, supporting new players through dedicated initiatives such as the FinTech Innovation Lab. A premiere accelerator program co-founded by the Partnership Fund for New York City and Accenture, it has so far supported 270 early-stage Fintech companies that have collectively raised $2.7 billion in new capital to date.

Rise, created by Barclays, is another Fintech initiative backed by a traditional bank. A hub for startups and scale-ups to connect with each other and Barclays connections, it offers coworking space and dedicated initiatives to support female Fintech founders. Additionally, at the end of 2021, the Federal Reserve Bank of New York launched the New York Innovation Center to support product innovation for the central bank community.

A Global Leader in Democratizing Access to Financial Services

With the world’s largest stock exchange just down the street from the newest web3 startup, New York City’s financial sector is just as varied as the city itself. And when the COVID-19 pandemic exposed and exacerbated existing gaps in financial inclusion, players throughout the ecosystem responded quickly. In the last few years, dozens of New York City startups have been founded to improve access to financial services, and many existing Fintech startups pivoted or adapted their products to prioritize greater equality.

Examples include Guava, a neobank and community platform serving Black entrepreneurs and small businesses that has raised a $2.4 million pre-seed round. Further, MoCaFi has raised more than $7 million to provide financial products to under- and unbanked communities. In December 2021, Goalsetter closed a $15 million Series A from major bank investors to scale its child- and family-focused banking and savings platform, and since its founding in 2018, alternative credit card company Petal has used more than $700 million in VC funding to quickly scale its machine learning tools and provide a critical lifeline for those with low or no credit scores.

A Hotbed for the Future of Decentralized Finance

New York City is home to the world’s most well-funded crypto startups: in 2021, the city attracted $6.5 billion in venture capital funding, or 46% of all VC funding for crypto startups in the U.S. Some of the largest DeFi companies call the city home — ConsenSys, Fireblocks, Gemini, NYDIG, and Paxos among them — and earlier-stage Fintech companies are increasingly incorporating Blockchain infrastructure into their product offerings.

New York City-based Uniswap Labs is the largest decentralized exchange operating on the Ethereum Blockchain, and Nivelo is using Blockchain to offer seamless and more secure digital payroll services.

A Global Public Square for the World’s Fintech Community

Both early-stage and established Fintech startups understand the importance of New York’s position in the global financial ecosystem, making the city a top business destination for Fintech leaders from across the world. NY Fintech Week is an annual, large-scale forum bringing together more than 17,000 fintech founders, investors, and financial service professionals, and NY Fintech Women is the city’s go-to event for convening and empowering women in Fintech.

NFT.NYC is one of the city’s most popular tech events, bringing together artists, advocates, and technologists using NFTs to build their projects. In addition, Mainnet’s annual summit addresses the ways crypto continues to disrupt adjacent industries.

Ample Opportunity for Fintech Founders

With a strong legacy, dedicated initiatives, and vibrant networking scene, New York City has ample opportunities for Fintech founders. It may be home to time-honored institutions such as Wall Street and the New York Stock Exchange, but with both traditional banks and dynamic new players fostering innovation, the financial ecosystem here is anything but staid.