Treasury Prime Raises $20M to Expand Banking-as-a-Service Platform

Treasury Prime Secures $20 Million Series B Funding

Treasury Prime, a startup specializing in banking-as-a-service delivered through APIs, has announced the successful completion of a $20 million Series B funding round. This new capital arrives approximately one year following the announcement of their Series A, and around 18 months after their previous funding event.

Funding Details and Investors

The latest investment was primarily driven by existing investors. Deciens Capital and QED Investors jointly led the round. Additional participation came from Susa Ventures and SaaStr Fund.

Capital Efficiency and Strategic Timing

Unlike many startups seeking funding out of necessity, Treasury Prime was not urgently in need of additional capital. CEO Chris Dean indicated to TechCrunch that the company demonstrated “super capital efficiency,” and hadn’t begun utilizing its Series A funds until January of this year.

The decision to raise further funds was motivated by a desire for aggressive investment in the business. Specifically, Treasury Prime encountered a capacity constraint, limiting its ability to onboard new customers. Increasing expenditure in early 2021 and securing new capital mid-year allows for accelerated hiring and improved demand absorption.

Investor Confidence and Market Positioning

For existing investors, the opportunity to increase their stake in a company experiencing demand exceeding capacity presented a compelling proposition. Dean shared that he engaged with around ten venture capital firms to ensure a market-reasonable valuation, ultimately receiving three term sheets before choosing to proceed with his current investor group.

To maintain a leading position within the expanding banking-as-a-service market – a sector seeing increased competition with entrants like Stripe – Treasury Prime intends to focus on connecting banks seeking fintech partnerships with fintech companies requiring both technology and banking relationships. This dual-sided approach aims to foster long-term growth.

Market Scope and Future Outlook

Dean envisions a substantial market opportunity beyond simply neobanks. He believes a wide range of companies will seek to integrate banking capabilities, similar to the success of vertical SaaS solutions.

Treasury Prime aims to provide the necessary back-end technology and banking access for these emerging services, effectively creating “vertical banking” integrated into diverse offerings.

Valuation and Growth Strategy

While the fintech market is substantial, Treasury Prime is not currently pursuing massive, nine-figure funding rounds. PitchBook data indicates a valuation of just over $40 million at the time of the Series A. The company’s current valuation following the Series B remains undisclosed.

The company is now poised to accelerate its growth, shifting from a frugal approach to a more rapid investment strategy with the newly acquired $20 million in funding.