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Transcend Street has raised $10 million in a Series A financing round led by Nyca Partners, a fintech venture capital firm, which will facilitate the US firm’s growth in Europe, as well as new product offerings.
The funding round was also completed with support from an unnamed major global custodian bank.
The collateral optimisation solutions provider says it has allocated the funds to capitalising on its recent growth in clients, headcount and product offerings, as well as further pursuing its ambition to become a key service provider to the buy-side community.
This regional growth includes the opening of Transcend’s first European office in the first half of 2021 and the formation of a local team to service its growing stable of EU-based clients.
The office is currently pegged to be based in London, subject to developments related to Brexit.
According to Transcend, its first-ever funding was over-subscribed but it chose to stick to its initial target of $10 million. However, Transcend’s CEO and founder Bimal Kadikar confirms he would be open to further financing rounds in the future.
“When we started the funding round we were looking for partners,” Kadikar tells SLT. “Nyca is a good match for us because they know what we do very well and the market’s complexities.
“Nyca also has a wide network of other firms that can assist us going forward. The money is nice but it’s the network they bring to bear that’s most helpful for us.”
Elsewhere, Hans Morris, managing partner at Nyca, says: “We’ve been impressed by the strategic thinking of Bimal and the Transcend team for many years, especially in developing solutions for complex business areas like collateral and funding optimisation.
“We are convinced that Transcend’s innovative solutions will deliver large-scale benefits for financial firms and will help them improve their competitiveness.”
The spike in demand for Transcend’s services due to its clients’ growing need to manage collateral more efficiently, partly driven by regulatory initiatives such as the Uncleared Margin Rules.
The firm says its client base has more than doubled in the past two years to include 10 of the world’s largest banks and brokerage firms.
Meanwhile, Transcend’s own headcount has also swelled, with 31 new hires so far this year bringing its global team to around 80. Most of the new hires are focused on technology and product development and are based in the US and India.
Senior hires among this number include Lisbeth Hadingham who joined from CloudMargin in February to become US sales director, and former chief technology officer of Enso Financial Kayur Parekh who now leads Transcend’s expansion of its cloud-based technology for the buy-side.
Further hires are expected to man the new office which, Kadikar says, will mostly come from local appointments with some potential to relocate existing staff.
“Our investors and clients share our vision for industry transformation,” adds Kadikar. “As a team, we are not alone in believing that analytics, optimisation and automation can provide a significant competitive advantage for firms’ funding and liquidity challenges.
“This investment will enable us to accelerate our global ambition and target our solutions across a range of sell-side and buy-side stakeholders.”
