The regional banking crisis of the past few weeks – created by appalling risk management by bank executives and corporate mega-depositors alike, and seemingly sparked by VCs and founders freaking out in group chats – might have least one true winner.
Zamp Finance, a company that wants to help startups invest excess cash in the super-safe U.S. Treasury market via BNY Mellon Pershing, raised a $21.7 million seed round last year, its founder said this week.
Uber CEO Dara Khosrowshahi, former SoftBank COO Marcelo Claure, and Doordash chief executive Tony Xu participated, Zamp’s founder Amit Jain told TechCrunch. Jain is the former head of Uber’s Asia Pacific division.
Zamp is offering a very basic, very old-school service that just about any corporate Treasurer should be able to do. And yet! We found out during the Silicon Valley Bank collapse that a huge array of lushly-funded startups just plopped billions of dollars of cash in the bank. To wit: the ten largest depositors at SVB held a total of $13.3 billion in total. That’s thousands of times more than the per-account FDIC insurance level, or, in layman’s terms, a very bad idea.
At the other end of the risk ignorance spectrum, you have Apple, which nominally is a company that makes money by sending instructions to factories in China, but which also has a very large side business managing more than $50 billion in cash. (And that’s about a quarter of what they used to oversee.)
Zamp’s offering is effectively a middle ground between “running what at times is the world’s largest hedge fund as a side project” and “putting billions of dollars in cash in the bank that gave you a good mortgage rate.” And that’s seemingly something that a lot of startups could desperately use.
Closers in the News
🏦 HSBC chair Mark Tucker defends buying SVB UK’s business. “We paid one pound, one pound for this company,” he said. “This was too good an opportunity to turn down.”
⏳ Remember Flow, Adam Nuemann’s very well-funded residential real estate investment, leasing, financial services toilet-unclogging company where renters think-to-own? Neumann is considering launching it in Saudi Arabia. He and Flow investors slash venture capital doyens Ben Horowitz and Marc Andreessen visited the kingdom last fall and gushed about Mohammed bin Salman. “Saudi has a founder,” Horowitz said. “You don’t call him a founder, you call him his royal highness.”
🤼♀️ Endeavour Group is taking a majority stake in World Wrestling Entertainment and will merge the pro-wrestling group into Ultimate Fighting Championship (UFC). The deal values WWE at $9.3 billion in enterprise value.
⛏ Teck Resources has rejected a $22.5 billion unsolicited bid from Glencore. The deal would have spun-off Glencore’s thermal coal and steelmaking businesses, but Teck said it didn’t want to expose it’s shareholders to the risk around Glencore’s coal business and oil-trading operation.
Just Asking 🤔
Is anyone feeling confident about the Florida insurance market ahead of 2023 hurricane season? The state-backed insurer is raising prices 14% and private carriers are looking for upwards or 60% increases.
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