A couple months ago we announced the first Core Underbanked Innovation Challenge for the most innovative new products serving the unbanked and underbanked in America. Since our fund is the premiere venture fund targeting innovation for this segment, it seemed like a logical thing to do. Much to our delight, we got a great response and I’m excited to announce who the finalists are – right here.
It was incredibly competitive. We got contributions from across the spectrum: individuals with a cool idea to massive companies with 30,000 employees (the median had 7 employees); seed-stage to publicly traded companies (most were privately capitalized); founded this year to operating for 50 years (most frequently in operation two years); ideas in credit (41%), in payments (38%), in financial capability (14%) and savings (7%).
While there were some obvious doozies, we had a tough time limiting the field to the four finalists who will present at CFSI’s Underbanked Financial Services Forum on June 9th. Those who didn’t get selected will quibble and complain, of course. We’ve been there. But we were looking not just for new, powerful ideas that could improve the lives of the un- and underbanked, but also for what we hoped would make a great demo, and a mix of ideas amongst the finalists.
In alphabetical order, our finalists start with FlexWage, a new company based in New Jersey, is trying to challenge pay-day lending and cash advances. They will show a consumer friendly, employer-distributed “pre-disbursement” system tied to a payroll card that will give employees access to money they have already worked for – based on their time and attendance records – at no interest for a small fixed fee.
Next, FIS. The fintech giant has long had a check-cashing solution which services some of the largest retailers. At the conference they will present some brand new features to PayCheck Accept, including a remote deposit capture capability that allow customers to snap a picture of a paper check on their mobile phone and have it deposited immediately in their checking account. This capability will be key to making mobile banking mainstream for the underbanked.
GoalMine, part of the mPower family of underbanked innovations, is working on becoming the Schwab for the bottom half of the economic pyramid. While their primary solution has been chronicled here and at CFSI’s conference before, we were blown away by their mobile and Facebook integrations. The former allows you to actually and immediately put into savings the $4.95 you could have converted into a skim soy Macchiato. The latter allows your friends to contribute tiny amounts to your big goals. Here’s mine. Feel free to test it and make a micro-contribution to my son’s Silver Spoon.
Last, but not least, PayNearMe will demonstrate how any 7-Eleven clerk can ring up a complex loan payment or cross-border remittance or bus reservation in return for cash with the same ease as selling a stick of gum. Any vendor, from Amazon to Progreso Financiero to Zynga could accept cash payments through PayNearMe’s system without requiring any new behavior or technology at the point of sale. Good news for the millions of underbanked who prefer cash over electronic payments, to the tune of trillions.
The audience will select a winner via SMS in real time at the conference (register if you haven’t already). The winner will receive fun, fame, and fortune. Fun in the form of access to VIP guests at the conference. Fame and notoriety through a national release and all 10 readers of my blog and twitter feed. Fortune in the form of $10,000.
So, congratulations to Flexwage, FIS, GoalMine and PayNearMe! You guys rock.
For the nay-sayers out there, we challenge you to prove yourself more innovative than these innovators. If we agree you may be saddled with a lot more than ten grand. Here’s what we look for in our investments.