Treasury management startup Vesto wants to help other startups put their idle money to work • TechCrunch

Benjamin Doepfner has been building companies since he was a kid.

One of its latest ventures is based in Berlin, where Germany had negative interest rates when it was founded in 2019 — meaning the company pays 50 basis points, or half a percent, for every euro in its account. .

“That waIt’s very, very frustrating for me.” Doepfner recalls. So he contacted the bank and asked about the corporate treasury, but was told that they would not work with companies that could not deposit at least 100 million euros.

That frustration led the young entrepreneur to launch Vesto, a treasury management startup aimed at helping other startups, in March this year.Manage, protect and extend your runway instead of letting it sit idle in your checking account Dopfner

“Ideally, Companies should never have a dollar of idle cash, but there are trillions, floating around in zero-interest checking accounts. He told TechCrunch. “We want to get rid of idle cash and help companies get to work.

Traditional banks have solutions, as have a few startups that have emerged in recent years. But Doepfner argues that other options are static or risky and “come with big restrictions.”

Money locked up in a slow, stagnant institution with little visibility and poor customer service, coupled with sky-high billing minimums, makes the product inaccessible to many. “New startups are tackling the corporate treasury from a crypto angle, leaving company funds at serious risk, while others limit control by tying funds into ‘one-size-fits-all’ pooled accounts… too little customization for companies.”

Vesto is registered as an investment adviser with the US Securities and Exchange Commission (SEC), in partnership with New Mellon Bank.

“The relationship is similar to a robo-advisor.” Dopfner said. “Sort of improvement or wealth for businesses. But our offering goes far beyond a robo-advisor, as our investment selection and management process is highly customized and high-touch compared to the robo experience.

Vesto has two pilot customers under contract and contracts that have not yet been agreed upon. Dopfner is on track to see $100 million in assets under management by the end of the year or early next year. Deposit amounts are generally higher, Dopfner added, with a certain amount being $10 million or $20 million.

The company announced today that it is going public It raised $2.8M with participation in a seed round led by Contary Capital Susa Ventures, SV Angel, Consortium and “Strategic” Angels including Sofi, Tinder, Don’tpay and other founders.

Vesto works with a technology partner that acts as an intermediary between itself and its custodian, BNY Mellon. But Vesto interacts with its clients and acts as a manager of their investments after creating an investment proposal.

“There’s a reporting layer, a control layer.” Dopfner said. “To help companies understand what’s happening with their money and have full visibility without giving up control.” For example, companies can withdraw their money as and when they want, he added.

“Usually we build a portfolio that includes U.S. Treasuries or money market funds or corporate bonds — sometimes CDs,” he explained. “We tried to maximize safety, liquidity and then optimize. We want to get good yields for clients but at the same time we want to invest in low risk investment properties.

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Vesto earns its money by charging a fee based on AUM (assets under management). Its target customers are Series A to Series D companies, but in the long term it wants to open up its offering to early seed stage companies, small businesses and non-profits.

Looking ahead, Dopfner thinks he’s going after the whole financial stack.

Cash yield is only one part of the financial stack, and we want to cover everything. Treasury is a good arrears because cash is the lifeblood of a startup. Every decision a startup makes can be determined by how much runway they have, and that runway accumulates. Doepfner told TechCrunch. “Corporate treasury — while a huge market — is the first step to cover the rest of the stack.”

Note that Will Robbins, a partner at Opposite Capital General, is some of his company Portfolio companies “leave millions of dollars a year on the table by not putting idle cash to work more effectively.”

“Especially in this fundraising environment, managing a runway is critical, and Vesto has built the best product to do just that,” he wrote in an email.

In Robbins’ view, other products see corporate treasury as a “nice to have” feature.

“New entrants like First Republic or Mercury don’t get the deep value of buying CDs or basic treasury bills like big banks, founders. Vesto’s philosophy is focused on empowering finance teams with a complete asset manager in one software platform,” he said. “Companies like Apple and Airbnb manage their idle funds with ‘internal funds’ and it would be interesting to allow every company to do the same.”

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