Fidelity Investments, Thomson Reuters and Amazon are backing a fintech startup programme in Boston that will provide early stage firms with free and discounted access to financial data sets to test-drive their applications.
The Fintech Sandbox is designed to be complementary to the glut of business accelerators and VC programmes that provide startups with access to seed funding.
Speaking to the Boston Globe, David Jegen, managing director of Devonshire Investors, the private investment arm of the Johnson family, which controls Fidelity, said: "Fintech entrepreneurs have a unique problem, which is the high cost of data to help them build applications. They raise $2 million of venture capital funding, and then spend $500,000 of it buying market data from Bloomberg or Thomson Reuters. Or they show up to customers, who say, 'Nice app, but it hasn't been tested on robust data sets.' We think that is a problem we can help solve."
The Sandbox will be supervised by Rocky Weitz, the former chief executive and cofounder of stealthy Boston startup CargoMetrics, which was set up in 2010 to collect data about the movement of commodities by ship for onsale to hedge funds.
The Sandbox will aim to source data on commodity prices or anonymized retail transactions, with Amazon Web Services supplying data processing and storage services.
Based in Boston, the idea is to create a virtual global resource which startups from around the world can access direct from their desktops.
"Inherently, this is a virtual offering,' Jegen told the Globe "London-based startups will have access to it, too."
He said the aim is to begin slowly with three early stage firms onboard before opening the programme to other startups by the end of 2014.
Inherently, the idea is similar to that pioneered by PFM outfit Yodlee, whose cross-platform API gives entrepreneurs access to over 12,000 global financial data sources, covering areas such as bank accounts, insurance, rewards programmes. Last month, the firm announced it had teamed up with global accelerator Startupbootcamp, Australia-based 25fifteen and Scotland's Entrepreneurial Spark to provide their startups with access to the API.