Two years ago, banking-as-a-service (BaaS) provider Treasury Prime, then a start-up, raised $20 million.
And on Wednesday (Feb. 1), the company’s embedded banking marketplace model, which connects banks, fintechs and businesses to increase revenue, deposits and reach new end-users, received an additional $40 million in trust votes. .
Treasury Prime CEO Chris Dean told Karen Webster that banks are ready to rethink their business models in 2021 when the pandemic takes hold.
“What we saw at the time was that there were ‘haha’ moments for many banks.They said, ‘Oh wait. real, no need to have branches everywhere. “
According to Dean, that recognition will allow banks to bring their compliance and financial services expertise to software platforms (such as Treasury Prime), and in doing so, bring innovation to both fintech firms and enterprises. can bring
It should be noted that its 2021 capital raising was done entirely by existing investors. Dean says it was “completely done to build a banking network because we thought, ‘It’s time to strike while the iron is hot.'”
triple digit growth
Over the next two years, Treasury Prime account growth exceeded 450%, with revenue growth approaching 400%.
The iron is still hot.
Treasury Prime announced Wednesday that it has raised $40 million in Series C funding from existing investors and some new investors. The round was led by his BAM Elevate, with investments from Banc Funds and Invicta, as well as continued participation from Series B investors Deciens, QED, and SaaStr.
Dean told Webster that the company plans to expand its network, which currently has 16 banks, and develop new products and services.
At a high level, the logistics and economics behind the platform model can be compared to a virtuous circle, even in the midst of a pandemic and a looming recession.
“More banks means more FinTech, which means more revenue for us,” he said. He said the platform model will help enterprise customers offer an increasingly broad range of financial services, creating new opportunities for fintechs and even SMEs, as pointed out in past interviews. For Treasury Prime, the current focus is on adding bank rosters to its platform.
“In five years, there will be $1 trillion in deposits managed by enterprise fintechs in the U.S. Today, that number is just $100 billion.” It’s not held in custody, not even in a handful of banks. They will spread across the United States, from large banks to territorial banks to community banks.
“The best companies want the best banking partners,” he said. “And we’re going to find the best banks,” he said. Treasury Prime plans to add about a dozen more banks to its platform over the next year or two.
Looking beyond 2023, he said, there could be a shakeout among many BaaS providers. But meanwhile, he said of Treasury Prime: …a more complex player with $800 million in deposits wants to spread across multiple banks to carry out the complex flow of funds. ”
The majority of FinTechs and banks connecting on the platform and via Treasury Prime’s API are focused on embedded banking. He said a common API would allow multiple banks of different sizes and product specialties, as well as his FinTech, to “talk” to each other and incorporate new capabilities.
Software-as-a-service providers serving the construction industry know banks are more familiar with the industry than ever before and are keen to offer bank account functionality to large builders to allow clients to deposit and withdraw money. You can find value, he said. When a project is completed and certain milestones are reached.
“Many of these businesses are cash flow sensitive,” he said, adding, “They need to have 100% visibility into how they run their business and interact with vendors, suppliers and end users.” I was.
With 2023 coming to an end and with $40 million in new funding on hand, Dean said the company is adding more product specialists and engineers. Treasury Prime is especially in demand for instant multi-bank transfers that can be sent in milliseconds.
“We are a software company that runs a marketplace,” he tells Treasury Prime’s Webster of his ambitions to scale in the coming months and years.