Securing the best funding solution is an enduring challenge for treasury teams. A corporate needing, say, US$500m in liquidity can struggle to get visibility on whether borrowing in the bond market or tapping commercial paper is the best option. Deluged with ideas from relationship banks, finding and acting on the right solution can be tricky.
That picture is also made more complicated by today’s interest rate environment. Decades of low interest rates meant the need for transparency on funding options was muted because the possible differential was typically small. “It was difficult to squeeze much out of low rates,” reflects Olga Chin, CEO and Founder of Interprice, the capital markets technology platform.
With rates having risen from 2022 to 2023, but forecast to fall in 2024, the dispersion amongst different pricing options has grown. “Issuing a long-dated fixed coupon bond that sits on your balance sheet if interest rates plummet, could be unattractive. It might be better to keep issuing short-dated commercial paper or floating rate notes for now and wait it out until interest rates come down. Treasury teams need this kind of comparison,” she says.
The Interprice platform compares pricings across currencies and asset classes including bonds, loans, and commercial paper. “We aggregate all the information out there in real time and help treasury teams unlock actionable insights,” says Chin, who swapped her career in banking three and a half years ago to set up the fintech which she describes as the equivalent of a TMS for funding data. “Treasury can just log in and immediately see all options; see what banks are proposing and say, ‘here is the lowest cost option today’.”
Chin also points out that Interprice empowers corporates where treasury teams sit in different locations. Sometimes when a company needs to borrow, the people making the decisions on what and how to borrow sit in a different location to those settling the trade. The platform allows all team members to have a single source of truth.
Chin set up the company with just a handful of corporate clients coming on board as pilot customers. Their insights and feedback helped build the platform that now counts one hundred global corporates including Ebay, HP Inc, Takeda Pharmaceuticals and others. One of the most important milestones was when Nasdaq Ventures, the global venture investing programme, provided Series A funding. Although this was only in 2022, it was the first ever Series A funding to a female founded start-up from Nasdaq Ventures. Nasdaq is also a client and the stock exchange’s Treasurer, Dana Laidhold, sits on the Interprice board. “Dana is our best source of first-hand treasury advice,” says Chin.
Chin has made much of her network. When she was developing the idea, corporate clients from her banking days offered help, letting her behind the curtain to see how treasury functioned and its role supporting a business from the other side of the desk. David Knopf, CFO of Kraft Heinz until 2019 was an influential, early backer of Interprice after Chin connected through Princeton’s Alumni network. “He said my idea made complete sense and ended up funding us personally. It was my turning point.” Knopf is now an independent board director.
Although the platform improves transparency that can lead to better execution, cost reduction is not Chin’s primary objective. Many treasury teams have important bank relationships that take priority in funding rounds meaning the hunt for the most competitive pricing is not necessarily front of mind. “Just because it is the tightest level, doesn’t make it the right trade,” she says. More importantly, the platform offers complete visibility to make fast and thoughtful funding decisions. For example, Interprice’s recent share repurchase offering is particularly sought after by corporates seeking precise, verified and automated reporting, she notes.
Much of the platform’s growth has recently come via word of mouth from US clients. She is now targeting corporates in Europe and Asia and plans to expand by offering funding transparency for corporates seeking to borrow lower down the credit spectrum. “We haven’t dabbled in this yet, but we will in the next year or so,” she concludes, speaking to Treasury Today from Interprice’s New York offices, staffed by 35 mostly tech-focused employees.
