IBM Partners with MaRS Fintech Hub

IBM is deepening its cooperation with Canadian fintech startups through Toronto-based MaRS, following up on pledges to help promising startups develop and commercialize their innovations.

The tech giant will join a network of corporate partners including CIBC, Manulife and payment processor Moneris in the MaRS C Suite, MaRS’ “corporate innovation district.” Partners provide startups with product feedback, advisory services and other forms of support.

What MaRS Is

MaRS Discovery District is a not-for-profit innovation centre on University Avenue in downtown Toronto, next to the University of Toronto and the University Health Network. It was founded in 2000 to help turn publicly funded research into companies, by connecting startups with advisers and investors. The first phase of the MaRS Centre opened in 2005.

The name originally stood for “Medical and Related Sciences,” but MaRS has long since moved beyond health research into software, cleantech and finance. Its fintech cluster brings banks, insurers and payment companies into the same building as the startups that want to sell to them. In February 2016, for example, American Express Canada joined the cluster as a sponsor, a few months before IBM’s move.

Why IBM Wanted In

“What we’re doing is saying: you have a great idea,” Patrick Horgan, VP, Manufacturing, Development & Operations at IBM Canada, said in an interview with TechPortfolio in June. “You’re missing some ingredients to be successful. Let’s help you through that because we have some history of being able to get through all of those cycles and to the world market.”

For a company like IBM, the logic runs both ways. Startups get access to technology, customers and know-how they couldn’t easily afford. IBM gets an early look at new ideas, and a chance to make sure the next generation of fintech companies builds on its cloud and AI tools rather than a competitor’s.

What Startups Get

As part of IBM’s partnership with MaRS, the company will provide technology and services, including access to IBM Cloud and cognitive computing (Bluemix and Watson), support for demonstration projects, data analytics internships, and “soft-landing export development opportunities.”

Fintech startups will also get assistance in opening new markets, completing international sales transactions, and connecting with new parties for collaboration.

A “soft landing” is a common idea in startup support: help for a young company setting up in a new country, such as introductions, temporary space and advice on local rules, so its first steps abroad are less risky. For a startup from a smaller market like Canada, selling internationally is often the fastest way to grow.

“As IBM transitions into the physical building in the space, we’ll continue to expand the programming elements of the partnership,” Adam Nanjee, head of the MaRS fintech division, said in an emailed response to questions. “This type of collaboration tears down silos to accelerate the rate of innovation and leads to tangible, meaningful results.”

MaRS’ fintech hub aims to connect the financial services sector with startups developing next generation technology in emerging payments, financial services, peer-to-peer transactions, alternative lending and crypto-currencies.

What Changed at IBM

Some of the names in this partnership didn’t last long. In late 2017, IBM retired the Bluemix brand, saying “Bluemix is now IBM Cloud” because the two names had “grown to be synonymous.” The services carried on under the new name.

Watson changed too. In January 2022, IBM agreed to sell healthcare data and analytics assets from its Watson Health business to Francisco Partners. Then, in May 2023, IBM unveiled watsonx, a new AI and data platform for generative AI and foundation models, alongside a collaboration with Hugging Face to bring open-source models to business customers.

For the fintech startups IBM was courting in 2016, that shift is a reminder of how quickly the tools change. The “cognitive computing” pitch of 2016 has been replaced by large language models, and banks are now asking very different questions about AI.

What It Means for Fintech Founders

Corporate partnerships like the MaRS C Suite can be valuable, especially in finance, where winning a bank’s trust is half the battle. Getting feedback from a CIBC or a Manulife before you’ve built the whole product can save months.

But it pays to keep your options open. Build on tools you could move away from if you had to, and treat a corporate partner’s platform as one choice among several. The brand on the box today may not be there in two years, and your product needs to outlast it.

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