Of the many issues highlighted by the collapse of Silicon Valley Bank, one big one was the liability of having too much cash sitting in too few bank accounts. Today a London startup called TreasurySpring — which has built a platform for businesses to put some of their cash reserves to work, in investments — is announcing $29 million in funding to expand its products on the back of a surge of interest in its services.
The funding, a Series B, is being led by Balderton Capital, with new backer Mubadala Capital and previous backers ETFS Capital, MMC Ventures and Anthemis Group also participating. Previously the company had raised some $13 million, and partial details of this latest round (£15 million to be exact) leaked out last week. We now understand that the full round of $29 million includes both primary and secondary funding and values the startup at close to $100 million.
Prior to founding TreasurySpring, the three co-founders Kevin Cook (CEO), James Skillen (CTO) and Matthew Longhurst (COO), cut their teeth working in hedge funds, asset management and investment consulting and it was that experience, Cook said, that gave them the idea of building a platform to help businesses manage their cash reserves better.
The challenge is a familiar one in the world of business: big entities typically have better access to services than smaller organizations. In this case, what the three saw was that treasury departments at huge enterprises might typically work with large investment banks to invest their cash reserves in diverse ways, but for companies that are not the largest in the world, there were no routes to do the same, so the answer was to build a platform that could help them manage their money in similar ways.
To be clear, TreasurySpring’s customers are not exactly small. On average, they might have between $5 million and $10 million in cash reserves, and they include FTSE 100 corporations and other multinationals, as well as startups that are scaling, and also charities. Some of them are retail behemoth Sainsbury’s, Schroders, dairy giant Muller, Hg, Bunq, Lendable and Tide. In all there are already some 250 using its platform, with another 100 being onboarded right now, the company says (part of the surge of interest that spurred this round).
The platform, meanwhile, has been built to include some 600 standardised cash investment products, tapping seven currencies across three chief categories: governments, corporates and banks such as Goldman Sachs, Barclays and Societe Generale. Just as consumers have been served a range of ETFs to allow them to access portfolios of investments they might not have been able to access previously, in this case TreasurySpring offers FTFs: Fixed-Term-Funds that it describes as “standardised and regulated” and aimed at packaging and making different investment options more accessible to the treasury teams.
Cook said that business has been growing steadily for years — it was founded in 2017 — but the recent meltdown at SVB, and subsequently issues at Credit Suisse, really put TreasurySpring “on the radar.”
“When it comes to the cash you have in your business, you need to know where it is, and that you’re not too exposed,” Cook said, “and secondly you want to maximize any return you can on that cash.” With interest rates now at only around 5-6%, deposit accounts are still not a great return, and “if you’re not making the most of your money, you’re being delinquent.”
That being said, there is still a lot of work to do build out what is effectively a new market being sold to a clientele that is risk-averse by nature, it seems. (Indeed there are few competitors here: Flagstone is another player in a similar area, although it focuses on high interest savings accounts.)
“First they had to build the product and it took them years to do that, and I liked the resilience of the team,” said Rob Moffat, the partner at Balderton who led the investment. “But now it’s about getting to market. How do you get treasurers to buy something new? Does one really want to be the first treasurer to buy a new capital product?”
Cook however is bullish on what he sees as an obvious opportunity.
“Largest institutions [collectively] have multiple billions in cash,” he said, “and the common thread among all of them is that while they may be long on excess cash, they are short on time and expertise.”
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
