Trace Finance, the Brazilian fintech that facilitates the exchange of investment rounds made by startups outside the country, is taking a new step towards the security of its clients. The company, which gained momentum by helping startups redeem their money when Silicon Valley Bank (SVB) went bust earlier this year, now wants to be able to keep them at home.
"With the collapse of SVB, our users demanded more security. As a rule, they didn't want to leave their assets in a bank that was smaller than the one that failed, so we saw a lot of money coming in, but soon the users followed the 'flight to safety' - they looked for more solid banks that were among the top 10 banks in the world," says Bernardo Brites, CEO and co-founder of Trace Finance.
It was at this point that the company turned to BNY Mellon Pershing, a BNY Mellon bank with more than US$44 trillion in custody, to create a global account.
"Today we are pleased to share that our clients' assets will be held in custody with the best alternative on the market, BNY Mellon Pershing, at the largest custodian in the world," says Brites.
Initially, the startup intends to bank American companies and offshore holdings from countries such as the Cayman Islands, the British Virgin Islands, the Bahamas and the United Kingdom, a process that will also help the startup investment ecosystem as a whole, in the CEO's view.
With the new global account, Trace customers will receive returns of up to 5.5 per cent a year, in dollars, through investments in US Treasury bonds. In addition, users can secure up to $5 million in FDIC (Federal Deposit Insurance Corporation) coverage through Cash Sweeps (a mechanism that distributes large balances in several banks to access millions of dollars in FDIC coverage).
With this initiative, the fintech company, which has already transacted more than R$2.5 billion, hopes to double its client base, which currently totals 500 companies, and bring in up to 60% of the value of future investment rounds.
Trace Finance, the Brazilian fintech that facilitates the exchange of investment rounds made by startups outside the country, is taking a new step towards the security of its clients. The company, which gained momentum by helping startups redeem their money when Silicon Valley Bank (SVB) went bust earlier this year, now wants to be able to keep them at home.
"With the collapse of SVB, our users demanded more security. As a rule, they didn't want to leave their assets in a bank that was smaller than the one that failed, so we saw a lot of money coming in, but soon the users followed the 'flight to safety' - they looked for more solid banks that were among the top 10 banks in the world," says Bernardo Brites, CEO and co-founder of Trace Finance.
It was at this point that the company turned to BNY Mellon Pershing, a BNY Mellon bank with more than US$44 trillion in custody, to create a global account.
"Today we are pleased to share that our clients' assets will be held in custody with the best alternative on the market, BNY Mellon Pershing, at the largest custodian in the world," says Brites.
Initially, the startup intends to bank American companies and offshore holdings from countries such as the Cayman Islands, the British Virgin Islands, the Bahamas and the United Kingdom, a process that will also help the startup investment ecosystem as a whole, in the CEO's view.
With the new global account, Trace customers will receive returns of up to 5.5 per cent a year, in dollars, through investments in US Treasury bonds. In addition, users can secure up to $5 million in FDIC (Federal Deposit Insurance Corporation) coverage through Cash Sweeps (a mechanism that distributes large balances in several banks to access millions of dollars in FDIC coverage).
With this initiative, the fintech company, which has already transacted more than R$2.5 billion, hopes to double its client base, which currently totals 500 companies, and bring in up to 60% of the value of future investment rounds.