20th Sept 2019

Lower risk, higher returns: why we invested in TreasurySpring

I’m delighted to have invested in TreasurySpring. It’s a business with an incredibly impressive product, a vast market opportunity and a world class team supported by an experienced and relevant group of advisors.

The proposition will resonate with any business sitting on excess cash: lower risk, higher return on your money

TreasurySpring is democratising access to the wholesale, short-term money markets by providing new digital pipelines to connect cash-rich firms to institutional borrowers from the sovereign, bank and corporate sectors. Simply put, clients of TreasurySpring are able to reduce their exposure to retail banks and generate higher returns on their money. This is enabled by Treasury Spring’s proprietary Fixed-Term Fund (FTF) platform.

Investing into Fixed Term Funds via TreasurySpring, and over time via a broader network of partners, enables companies to access assets such as US Treasury Bills that reduces retail bank exposure for corporates (as most have their cash sitting in deposit accounts) and offers a higher yield than the bank accounts.

The market opportunity is huge

This proposition resonates with many sectors. Today, the business has an impressive pipeline of start-ups, family offices, corporates and PE funds looking to get access to the Fixed Term Fund platform and in the medium-term we expect this pipeline to include asset managers and larger corporate treasury departments. London is a fantastic place to build this business — the financial services capital of Europe — though the proposition resonates across the globe.

The tech + the FTF legal structuring are a strong moat

The TreasurySpring technology platform and proprietary automated workflow technology, Workscheme, enable efficient client on-boarding (days vs weeks for alternatives), low touch operational support and deliver a simple, intuitive interface for clients. Workscheme is impressive and should enable the team to remain lean as client volumes grow.

FTFs are a new, high quality, short-term investment product that offer diversified short-term investments, guaranteed liquidity (with FTF matching the term of the underlying asset e.g. a 30-day US Treasury Bill FTF will invest in a US Treasury Bill that matures in 30 days), and typically much higher yields. The way in which the FTFs are created and managed is innovative and cannot easily be replicated and we expect broader adoption of FTFs over time.

It’s all about Founder <> Market fit

VCs often talk about the importance of this aspect and for TreasurySpring it simply wouldn’t be possible without the deep industry and product knowledge the team has.

Over the past few years we’ve met several hundred Fintech founders and this is a team that really stands out. The company was co-founded by Kevin, Matthew and James who previously started (and sold) a cash management consultancy after meeting as colleagues within a hedge fund. We have been incredibly impressed by the team’s deep understanding of the market, their ambition to build a big business and the professional way in which they have acted throughout the investment process.

The founding story really resonates — they were working with many ‘sophisticated’ investment companies and the team was amazed at how little their clients understood about fixed income and cash management. It’s here they identified the need for a simplified product to enable cash rich businesses to reduce their risk profile and increase yields with access to a broader range of assets and products.

The next 18 months are all about building

While still early on their journey, the team has achieved an impressive amount over the past couple of years — having already attracted multi-national corporations, family offices, charities, fund managers and VC-backed businesses as clients. The next phase of growth involves refining the GTM and focusing on a few target client profiles, growing the team (primarily, in sales and tech) and product offering, and building the TreasurySpring brand across the cash management sector.

If you’re long cash and want to take advantage of this product, let me know — I’ll be promoting this widely across our portfolio @ MMC!

I’m excited about TreasurySpring and look forward to supporting the team in delivering on this huge opportunity.

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