Fintech CAFE seeks startups for a new season of financial equity innovation

Delaware has been a center of financial enterprise technology for years, but it’s projects like Fintech CAFE that are putting the state on the map as a place for fintech entrepreneurs. 

After a successful inaugural cohort this spring, the Fintech CAFE accelerator is returning for the fall. It gives financial equity fintech startups the opportunity to apply for the 8-week hybrid program based at the FinTech Innovation Hub at the University of Delaware’s STAR Campus in Newark. For the last cohort, the program provided an opportunity to see what Delaware offers, both in terms of the fintech industry and for young businesses in general, as well as to grow their startups, founders in the cohort told Technical.ly. 

Fintech CAFE, now sponsored by North Wilmington fintech company Best Egg, is seeking startups in Delaware and beyond with a mission to make financial products, from access to loans to financial literacy tools, more accessible to people and communities that have been historically underserved by the finance industry.

Applications open on August 5, and will remain open through September 2, with the program kicking off the week of October 8. There is no cost for participants, and no geographic restrictions, though it requires participants to attend three in-person days in Newark, Delaware in week one and one day for the demo day showcase at the end. 

New York fintech leader and entrepreneur Kristin Castell developed Fintech CAFE and chose the Fintech Innovation Hub as the home base of the program in 2023. The first cohort launched in March with six startups — Muse Tax, NESTER, Parlay, Stratyfy, Sunny Day Fund and Wellthi —  selected out of 60 applicants. 

So, what kind of startups are a good fit for Fintech CAFE? Three of the six inaugural cohorts shared their missions and their fintech Cafe experiences as the program continues forward with cohort No. 2.

Outside founders can learn Delaware innerworkings while getting more access to capital

Jay Long, cofounder of Parlay, a capital access application startup based in Alexandria, Virginia, felt the benefits of what he called Delaware’s critical role in the region, with its central location and proximity to multiple ecosystems. 

“One of the surprising benefits of working with CAFE is, even though we’re in Alexandria, which isn’t super far, I don’t think we’ve gotten as much understanding of business ecosystems in this space before CAFE.” 

Parlay is entirely founded by military veterans and military spouses, including CEO Alex McLeod and CTO James Cho. It launched in 2022 with a goal of helping underserved small business owners gain access to capital. 

Since its founding, it has participated in several accelerators, including Boulder-based global accelerator TechStars.

“We increasingly see accelerators as like different musical instruments in a symphony,” Long told Technical.ly. “On the one hand, they’re all instruments, but as you go into them, very different roles apply, there are different points of emphasis and focus.”

CAFE looks for startups with a strong mission behind the tech

Laura Kornhauser, who cofounded another inaugural Fintech CAFE startup, Stratyfy, with Dmitry Lesnik, became interested in financial equity not long after quitting a good but unfulfilling job at JPMorgan. 

She returned to school to update her skills, during which time she received multiple targeted offers to apply for a credit card. When she finally applied, she was rejected because her income while she was in school was low. 

“That really opened my eyes to the way credit decisions are made,” Kornhauser said. “For me, this credit card wasn’t going to change my life. But for some people, and especially for mortgages and small business loans, these are the types of credit products that can meaningfully change someone’s financial future.” 

Stratyfy, based in New York City, works with financial institutions to help them make credit and risk-based decisions, including with an AI-based product called Unbias that uncovers biases embedded within data sets and removes them from system models.

Stratyfy’s research found, for example, that 13.27% of Black applicants (1,100 mortgages) who were denied credit had nothing in the data that justified a rejection. The platform seeks to reduce those kinds of human bias-based rejections.

Stratfy’s mission aligns so well with Fintech CAFE that Kornhauser and Lesnik didn’t hesitate to apply after meeting Castell.

“There was an interesting intersection of financial services that exists in Delaware with the mission alignment,” Kornhauser said.

One Delaware-based startup in the first cohort now seeks to expand nationally

The sole Delaware-based founder in the inaugural cohort, Brendan Kennealey brought his homeowner budgeting platform, NESTER, to Fintech CAFE. NESTER estimates how much a homeowner needs to save monthly to be prepared for upcoming home maintenance costs, 

Soon after it was completed, New Castle County announced a contract with NESTER that would give all homeowners and home buyers in the county free access to the tool. 

Before that contract, Kennealey and his team focused on home buyers only, including a 2023 contract with the city of Wilmington that made the platform free to individuals and families participating in the city’s partner homeownership programs.

Kennealey is now looking to expand NESTER into other states and municipalities but will keep its base in Delaware.

“Delaware’s got a great setup,” Kenneasley said. “Being a small state, it can be nimble, you can get stuff done, you have access to everybody in Delaware. Then, of course, the history here of having a lot of financial intellectual capital. It can be a real catalyst for startups.”

➡️Read more: 

• Applications will open on the Fintech CAFE website on August 5.
• Meet CAFE’s first fintech accelerator cohort
• New Castle County gives homeowners free access to maintenance tracker NESTER
• The FinTech Innovation Hub is about making an impact