New Jersey is creating a strategic innovation center for financial (fintech) and insurance (insurtech) technology startups in a partnership with Silicon Valley-based innovation platform Plug and Play.
The new innovation hub will be known as the Fintech Accelerator at Stevens Institute of Technology (NJ FAST).
The New Jersey Economic Development Authority (NJEDA) and Plug and Play have signed a letter of intent to form a limited partnership. The two entities will oversee NJ FAST’s accelerator program with an opportunity to make equity investments into select participating companies.
New Jersey’s own Stevens Institute of Technology and financial services giant Prudential have stepped up to be, respectively, the academic and corporate founding partners.
The plan is for NJ FAST to host two cohorts of at least 10 companies per cohort per year. Companies will be recruited globally to participate in the program, but at least 20% of the cohort will be from New Jersey and there will be a focus on diversity, equity, and inclusion.
Equity investments of up to $1 million will be made in at least 15% of participating companies. Pending approval by its board, the NJEDA intends to invest up to $17.5 million in the fintech accelerator.
NJ FAST is the first strategic innovation center (SIC) location on the East Coast for Plug and Play, which is known for connecting startups, corporations, venture capital firms, and government agencies, and has partnerships around the globe
According to the announcement, Plug and Play plans to commit at least 10% of the total capital commitment up to a maximum of $2.5 million in funding for the new innovation center and will work to secure funding and industry support from various corporate entities.
Plug and Play’s network consists of 50,000 startups, over 500 corporations, and hundreds of venture capital firms, universities, and government agencies. From 2020 to 2022, Plug and Play was the most active startup accelerator in the world, according to CB Insights. Plug and Play invests in over 250 companies a year.
NJEDA Chief Executive Officer Tim Sullivan said the aim is to “make New Jersey a national leader” in fintech and insurtech by supporting innovation, “which will help empower startups and drive the creation of new technologies that in turn will create jobs and support long-term, sustainable economic growth across the state.”
Governor Phil Murphy said NJ FAST will allow for new entrepreneurs to bring their world-class ideas to New Jersey, further increasing the state’s talent pool, all while capitalizing on the resources and expertise at Stevens Institute of Technology.
Stevens Institute and Prudential will provide training and other educational, licensing, research opportunities for start-up companies participating in NJ FAST, and more. Stevens will also host events each year and will provide a standing team of student interns who will work to support participating companies.
Stevens Institute already has fintech-focused research center, the Center for Research toward Advancing Financial Technologies with experience in decentralized finance, AI-enabled finance, quantum finance, and solutions to climate-related impacts on investment.
“NJFAST is an excellent example of a public-private-higher education collaboration that has the potential to bring significant economic value to our State and to serve as a national and global leader,” said Stevens Institute of Technology President Nariman Farvardin.
The founders hope to build on the state’s existing financial industry that incudes Prudential, Barclay’s, Fiserv, and JP Morgan.
Topics InsurTech Tech New Jersey
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