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Geco started life as a mobile bank for consumers. But over time, fintech startups have refined their model – largely driven by demand – and are now pushing into corporate cash storage.
In 2020, Kitchen They made headlines by being the first fintech to get A nationally managed Bank of America. The company was unique in another way: Instead of holding customer deposits, he used the money to buy short-term Treasury bills (T-bills).
Then last November, Jiko Banking Dive reports that it is then shifting to a more consumer-focused model and “accelerating its business-to-business strategy.” At the time, the publication reported that the startup was “receiving many inquiries from other fintechs interested in using the technology.”
As a result, then it turned into what CEO and Founder Stefan Lintner as a “B2B2C” model.
This year, Geico saw everyone “suddenly pay attention to T-bills,” Lintner told TechCrunch. For the uninitiated, T-Bills are – according to Investopedia – “short-term U.S. government debt obligations backed by the Treasury Department with a maturity of one year or less.”
That focus led the startup to rethink its strategy to meet that sudden surge in demand. Today, the former Goldman Sachs trader Gicon as a “We’re building a full-stack financial network designed to store and move money efficiently.”
“We used to focus on retail access to the API, but we’re seeing such an influx into our enterprise product that we’ve made our cash storage product our key offering now,” Lintner told TechCrunch, and that’s where we’re focused on distribution.
And now the startup has announced that it has raised $40 million in a Series B funding round to help meet demand.
For the product, simply called Geico Cash Store, Geico’s plans are to offer companies – from start-ups to global corporations in various industries – access to T-bills at a “low cost”. The advantage for companies, especially startups, is that T-bills that have raised or have a large amount of money are an asset class that offers “very competitive” potential yields, Lintner says.
On top of that, the fact that Geco has a bank charter – unlike most fintech companies – and is a broker-dealer, the company says, can help customers conduct banking and financial activities “safer and more secure” than other offerings.
For example, he explains, a money market fund is “a security wrapped around the repo markets and maybe some T-bills.”
Image Credits: Kitchen
Geico’s claims are lofty, but it clearly shows that many investors are willing to bet.
Red River West led Geico’s Series B financing, which included participation from Trousdale Ventures, Owen Van Natta, Temaris & Associates, La Maison Partners, BPI France, Airbus Ventures, Anthem Ventures, Upfront Ventures and Radicle Impact. The new round brings Geco’s total raised since its founding in 2016 to $87.7 million. He declined to comment.
Soon, the company plans to allow companies to store money and deposit directly into T-bills in “instant liquidity”, but can move 24/7 on the network.
This option, Lintner believes, has proved more attractive given the challenging macro environment.
Stephan Lintner, CEO and co-founder of Geico
“Anywhere that has a little money these days has to worry about all the risks. When you decide where to put it, you need yield, and T-bills are yielding a lot right now,” he told TechCrunch.
Alfred Verisel, founding partner of RRW, said that the company was attracted by Geico’s vision to “open up a new category in cash storage – an infinitely scalable infrastructure – and access to low-cost TB accounts – thanks to its secure and liquid nature.” And a competitive B2B product. “
“The launch of the Geico Cash Store comes in a macro economy where companies are looking to make cash operations to combat inflation and volatility,” he added.
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