Startup money in Cleveland is finally beginning to circulate.
A new financial-technology (fintech) startup is about to make a national “splash.” Tech powerhouse Park Place Technologies strengthens its European operations with an acquisition. And JumpStart continues to power the entrepreneurial ecosystem with a new fund.
Splash Some Cash. Startups are rarely overnight successes. There are many sleepless nights and stressful months before a kernel of success is found. Splash Financial is a perfect example of this long journey.
Originally conceived as a college savings platform using the concept of “save more and borrow less,” it became clear that the company had to pivot to thrive.
CEO Steve Muszynski expertly guided the company to focus on becoming an alternate-funding platform for physicians instead, meaning they help medical students access low-cost loans for college.
“There was a gap in the marketplace,” noted Muszynski, “where the government loan program were pooling risks inappropriately.” Doctors, it turns out, are better-than-average financial risks. Now Splash Financial had a worthy mission.
The company will roll out its refreshed fintech platform in Northeast Ohio during the next few months on a robust digital platform that can ramp-up quickly as Splash attacks new markets. Splash plans to target the Cleveland Clinic, University Hospitals and MetroHealth.
There are about 3,000 physician residents in Northeast Ohio, which could represent almost $600,000,000 in mispriced debt. That could break down to $200,000 per doctor of inappropriately priced personal debt for medical school.
Muszynski graduated from Ohio State University in 2011 and went to work for GE Financial in Houston then Atlanta. He left the safety of one of the world’s largest companies to start Splash in the original Bizdom accelerator in Downtown Cleveland, which has since closed its local office. It was at Bizdom that Muszynski was introduced to the Chief Investment Officer of RocketLoans and became immersed in the culture at QuickenLoans. The company also found mentoring support from JumpStart.
Splash Financial completed a $3.3 million financing round in January of 2017 from several local angels and will become the newest entrant in the booming digital lending marketplace that includes LendingClub, OnDeck, SoFi and Cabbage.
The company is now working with banks to help build an efficient lending platform where a strong capital source (i.e. – the banks) do not have immediate access to the doctor marketplace. Splash hopes to increase loans and net interest margin to the banks. Splash will originate the loans and offer a “Forward Flow Contract” which represents a commitment from the bank to buy the loan the company originates. Muszynski said he believes the company can create $100,000,000 in loan originations in its first year.
“We cannot imagine a better place than Cleveland to launch a fintech company focusing on the medical industry,” Muszynski said.
Buying the Park. IT services powerhouse Park Place Technologies, based in Cleveland, recently acquired Prestige Data Centre Solutions located just outside Birmingham, England.
The acquisition is great example of how Park Place is driven to become a force in the global market for hardware maintenance and support. The deal further strengthens the reach of Park Place in Europe.
Park Place is a provider of hardware maintenance and support specializing in extended warranty services for data storage, servers and network equipment. The company’s core competency of service maintenance coupled with professional services for storage, server and network equipment enable Park Place to extend the lifecycle of customer data centers. The company was founded in 1991 and grown substantially since then under the tutelage of CEO Ed Kenty.
Prestige Systems was launched more than 25 years ago and focuses on IT infrastructure solutions for data centers.
Kenty said expects to continue to grow and possibly acquire more companies in the future.
JumpStart Cheddar. JumpStart, the region’s entrepreneurial-development giant, recently announced it will partner with the Cleveland Foundation for a new-look organizational philanthropic fund.
The JumpStart Future Fund will focus on initiatives that extend the economic benefits of entrepreneurship and small-business growth to all communities, rather than those who are already connected to the venture-capital ecosystem.
JumpStart and the foundation will work over the next several months to finalize the details of the fund’s priorities, according to a press release. For more information go to www.jumpstartinc.org.
Read the full story at cleveland.com.