VC Saves $1m Using Deaglo's SPV Banking

Deaglo saves a Venture Capital firm $1m on their cross-border payments.

Benefits for the client of working with Deaglo

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VC Manager was able to pay out in SEK, CHF and EUR at an extremely low spread which amounted to nearly $1m in savings on $100m+ in transactions 

Deaglo setup the VC’s new multi-currency account within a few days 

The new account was used to pool investors from numerous different countries and was held in local currency until the VC had completed due diligence

Client type and solutions

Deaglo worked with a Venture Capital Firm client using Executive solutions and products including Transactional Cost Analysis. 

Background

A US based VC fund was acquiring both primary and secondary stakes in foreign private placements. The fund had created an account to receive USD from their Canadian and US investors into their Special Purpose Vehicles (SPV’s). They needed to send payments to companies and individuals in local currencies such as CHF, SEK, and EUR totally just over $100m.

The Challenge

The client was working with their US domestic bank who wasn’t able to offer a local CAD account for investors. This meant that CAD investors were met with unnecessary fees when looking to invest into the fund.

 

The bank offered no clarity to the VC  on the charges being applied; this is not uncommon with many banks and meant that the VC manager was unable to account for these fees into their capital calls.

The Solution

Using a Transaction Cost Analysis tool, Deaglo was able to show that on a number of previous transactions that the client was paying over 100bps more than they should have been on their foreign currency payments. 

 

Deaglo also worked on opening a multi-currency account which would allow the VC to pool investor funds as they completed due diligence on their target acquisition. The VC could then seamlessly execute the transaction acquisitions in local currency knowing the exact low flat fee that they were being charged.

The Conclusion

Deaglo’s alternative banking solutions meant that the VC was able to quickly open a multi-currency account, lock in the rate and secure a block equity share price and execute their acquisitions quickly and efficiently at a minimal cost. 

 

Investors were also able to invest into the manager's fund using their local currency, avoiding any unnecessary fees and barriers to investing. 

 

The VC was ultimately able to save $1m on their transactions.