Fixed-term funds (FTFs) have historically been a bank-to-bank market. FTF products allow for investing into some of the safest assets, including U.K. government bonds, U.S. government bonds and highly rated corporations. They allow holders of large amounts of cash (such as charities, private funds, family offices, etc.) to reduce and diversify their risk, but also increasing returns.
TreasurySpring is a fintech startup that is aiming to open up access to this area of financial markets by creating a fixed-term fund platform. It’s now raised a $10 million Series A investment round co-led by MMC Ventures and Anthemis Group. Existing investors, including ETFS Capital, participated, taking the total it has raised to $15 million.
TreasurySpring says its FTF platform gives holders of large cash balances online access to a menu of proprietary cash investments on a daily basis. This gives them access to an asset class that is usually only available to major financial institutions.
Founded in 2016 by Kevin Cook (CEO), Matthew Longhurst and James Skillen, Cook said in a statement: “Following a break-out 12 months in which we increased AUM by 10x, we wanted to bring in the best possible investment partners to support our ambitious growth plans. We have long admired both Anthemis Group and MMC, so I am delighted that they co-led the round and we are excited to work with Sean, Ollie and their respective teams, as we move into the next phase of our journey to redefine cash investment and front-office treasury.”
Given the current low and negative interest rates and an uncertain global financial outlook, TreasurySpring says its platform is likely to appeal as an alternative to traditional bank deposits and money market funds. It says it’s now issued more than $9 billion of FTFs to a client base which includes FTSE 100 and other listed companies, fund managers, large private companies, charities and family offices.
Yann Ranchere, partner at Anthemis Group said: “With its ambitious and mission-driven team, TreaurySpring is opening the traditional money market industry to a whole new pool of participants.”
Oliver Richards, partner at MMC Ventures, added: “Having worked with the team at TreasurySpring for the last two years, we have absolute confidence in their ability to deliver on their unique vision to level the playing field in cash investing and short-term funding, through a platform that not only brings value to its clients and issuers but also enhances the diversification and systemic stability of the money markets as a whole.”
Does TreasurySpring have any direct competitors? The company says no. That said, bank deposits and money market funds are still the only tools available to most holders of large cash balances, so the banks and asset managers that offer these products are competitors, “to an extent” admits the firm. However, they are also “collaborators in many instances.”
Cook said: “Adoption of the platform is being driven by a realisation that the risks and returns of the traditional [deposit and MMF] options are becoming ever less attractive, whilst building out the infrastructure to do anything else is complex, cumbersome, time consuming and expensive.”