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Case Study
US Based Venture Capitalist

VC firm saves $1m in FX fees using Deaglo's SPV Banking

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The Problem

The VC consistently invests in international companies via Special Purpose Vehicles (SPVs) that expose the firm to hidden fees charged by banks on these types of transactions.

 

The FX space is one of the few areas of finance that is still unregulated when it comes to commissions. This means that when working with a bank or a broker, providers could find themselves in conflict with the client, trying to make the most out of a single transaction, instead of considering stable and solid long-term relationships. 

 

Prior to using Deaglo, the VC was being charged an exorbitant amount on its international transaction through its relationship with a traditional bank.

 

Further to this, for each SPV, the VC had to set up a new bank account. This was a lengthy process and took weeks each time an SPV was set up.

 

The VC’s management team decided to explore new alternatives and reached out to Deaglo where we provided them with an overview of our offering. Our team explained to the VC that we could reduce the cost of trading, provide a fixed spread for ease of budgeting and reduce the administrative burden and waiting time for onboarding each SPV.

The Solution

Firstly, we had a short call to understand not only the current trading activity, the investment structures, the currencies required, and flow estimation, but for us to analyze and try to match the best fit for the client from our group of providers. 

 

Then we reached out to its panel of FX providers and presented the business case. The focus of the business case was on providing a competitive fixed-spread solution for the client and a quick onboarding process for subsequent SPVs once the GP was onboarded. After an appropriate counterparty was selected the VC’s management team approved the onboarding process with our counterparty where we worked with the client in the gathering of documents and breakdown of KYC documentation with the counterparty teams aiming for a seamless process for the client. 

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