When banks and financial technology firms don’t always speak the same language, but want to work together, they need a translator.
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Enter Treasury Prime: the San Francisco startup makes software that reduces the time and expense of labor-intensive processes for banks, such as account creation and “know your customer” identification, and connects banks with fintech companies.
“There is a historic problem that banks and fintech companies are like oil and water—they don’t mix,” CEO Christopher Dean told Crunchbase News. “We help banks run better and ask them if they would like to talk to fintech companies about products they are developing.”
On Tuesday, Treasury Prime announced a $9 million Series A round led by new investors QED Investors Partner Amias Gerety, who was former acting assistant secretary for financial institutions in the U.S. Department of the Treasury under President Barack Obama, SaaStr founder Jason Lemkin, and NYCA Partners Managing Partner Hans Morris. Y Combinator, which funded Treasury Prime’s seed round, also participated.
“One of our goals was to attract QED,” Dean said. “They know more about banking, and Amias worked for eight years at the Treasury [Department] under Obama, so this is perfect for us.”
Gerety said via email that QED was excited to be leading the investment in Treasury Prime.
“We believe that the future of financial services will require deep partnership between banks, fintechs and other software companies,” Gerety said. “Treasury Prime has the leadership and the technical capacity to help companies on all sides of that relationship move quickly and effectively to bring that vision to life.”
The new funding round will be used to build out other products, as well as staff up a sales and marketing team, he said.
The company was founded in 2017 by Dean and others who were behind the Silicon Valley Bank’s application platform interface, he said. It previously raised $2.5 million in a seed round from Y Combinator, Dan Kimerling at Deciens and Leo Polovets at Susa Ventures in 2018, for a total of $11.5 million, Dean said.
Dean said banks would like to work with fintech companies, but are often worried that fintech companies don’t have to adhere to the same governance that the banks do, possibly endangering the bank’s charter.
“The fintech company has to use the same governance as the bank, so if you are using them, you should be comfortable that they have to use the same system,” he added.
Treasury Prime’s revenue has grown 10 times year over year, Dean said, and was aggressively hiring until the COVID-19 pandemic happened. It has 14 employees and expects to raise that number to 22 by next January, he said.
When the pandemic forced people to stay at home and bank from their computers, Dean said he reached out to his clients to see if they needed help with the U.S. Small Business Administration’s Paycheck Protection Program.
Most of his clients are not loan businesses, but they worked together and gave out $1 billion in loans in three days, Dean said.
“It was a cool thing because not only was it $1 billion, but one of the great things is we think it saved 60,000 jobs, and that is fantastic,” he said.
Illustration: Dom Guzman