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March 9, 2020
Startup owners from four states and the District of Columbia will spend the next 10 weeks in Sioux Falls as part of a new fintech accelerator program.
Falls Fintech is a division of Central Payments, which is based in Dell Rapids and is a division of Central Bank of Kansas City.
“This was started to help those younger, newer companies accelerate their growth and accelerate their product to market,” said Heather Berg, program manager.
The incubator is geared toward accelerating market readiness of early-stage fintech, or financial technology companies, that could become users of Central’s products.
Central Payments is a prepaid-card issuer that administers payment card and funds disbursement programs via retail, employer/payroll and online outlets nationwide.
Central Bank of Kansas City is a 68-year-old, family-owned bank based in Kansas City, Mo., and one of 135 financial institutions in the country that is certified by the U.S. Treasury as a Community Development Financial Institution.
“We felt very blessed the five companies we have are going to be a great group of people, and they’re all super excited to come to Sioux Falls, which is awesome,” Berg said.
The accelerator starts today and runs through May 15, based out of spaced leased from Experity, the former DocuTap, at 101 S. Phillips Ave.
“We are thrilled to expose these entrepreneurs to Sioux Falls and experience why we are the hub for banking and payments,” Trent Sorbe, president of Central Payments and co-founder of Falls Fintech, said in a statement.
“Central Payments and our Falls Fintech accelerator were created to enable the next generation of financial service companies and continue the banking evolution that started in South Dakota in the mid-1980s.”
During the 10 weeks, participating companies will receive what Central calls a “high-intensity curriculum with an elite network of financial, payment and technology professionals across the globe.”
Sponsor MasterCard will be paying for all participants to travel to New York City for a venture capital day, where they will meet with potential industry investors.
“This inaugural group of companies are developing exciting financial products that leverage new technologies to solve financial challenges, particularly those experienced by underserved consumers and small businesses,” said Nikkee Rhody, co-founder and managing director of Falls Fintech.
The five companies selected will receive $30,000 in capital in return for 2 percent equity in their company and a program valued at more than $70,000. They are:
The Falls Fintech accelerator is patterned after one in Kansas City.
Companies “needed to have raised less than $2 million in external funding and have a minimum viable product and then have the need for a bank, whether it be a card-issuing or a sponsored bank,” Berg said.
Central Payments has the first right of refusal to work with the businesses following due diligence.
“We didn’t find that a deterrent in any way,” Berg said. “They were excited to have a relationship at the end of the 10 weeks that would benefit the company.”
The 34 Central Payments employees will be involved with the incubator as mentors and speakers.
“We are going to cover everything from product design and development to leadership and HR, marketing, the whole payments ecosystem,” Berg said.
A public kickoff reception will be held from 5 to 6:30 p.m. today at 101 S. Phillips Ave., Suite 104.
Most of the participants will fly home on weekends but are living in Airbnb rentals or staying at hotels, including Hotel on Phillips.
There will be another cohort coming in August that will stay until October. The hope is that the participants will gain a positive impression of Sioux Falls while they’re here, Berg said. She would like to connect with organizations looking to connect with the entrepreneurs.
“Zeal (Center for Entrepreneurship) has been fantastic, but we’re just trying to figure out who else we could go to who would have good reason to welcome these guys and get to know them,” she said.
In Little Rock, Ark., a similar incubator has existed for about five years, and several companies have relocated permanently to the city, she added.
“Obviously, it’s not a requirement, but we’re going to hopefully embrace them and love them and see what we can do to get some of them to stick around.”
Startup owners from across the U.S. will spend the next 10 weeks in Sioux Falls as part of a new fintech accelerator.