Trovata, a fintech that provides cash management to small- and medium- size businesses, has acquired an enterprise treasury management system to expand its offerings to business customers.
It bought Financial Science Corporation’s flagship treasury management system, ATOM, according to a company announcement.
With ATOM, Trovata will be able to offer deeper treasury management features such as cash positioning, cash forecasting and liquidity management, bank relationship management, financial risk management (including FX and interest rate risk) and financial reporting.
“ATOM was built for complexity and designed to serve Fortune 500 treasury teams with global scale,” said Financial Sciences CEO Alf Newlin in a statement.
Trovata plans to rebrand the product to Trovata TMS, according to Trovata CEO Brett Turner.
“It’ll be a two-stage process,” Turner told American Banker. “We are going to graft it in [at first], and then we’re going to completely rework it into Trovata’s image from the ground up, but that will take a little bit of time.”
Trovata is a San Diego-based fintech company that automates cash reporting, forecasting and analysis for midsize and large companies. Its customers, including Square, Etsy and Krispy Kreme, use the company’s products for cash management from all their banks and accounts.
Trovata connects with large banks, such as JPMorganChase and Wells Fargo, through its direct application programming interfaces, or APIs. It then aggregates small-business or corporate account data from multiple banks and uses it to conduct cash-flow analysis and forecasting, with little setup needed on the part of the business customer.
“The bank is doing the banking side, but with the digital experience that’s where we come in,” Turner said.
Trovata also announced a $9 million funding round from State Street Corporation and PNC Financial Services Group. This brings Trovata’s total funding to $80 million, according to a company statement, with over $50 million previously raised from banks including
Trovata also powers J.P. Morgan Asset Management’s corporate investing and trading platform, Morgan Money, through a partnership established with the bank in 2022.
“Banks aren’t tech companies,” Turner said. “Banks have had online banking for a long time, but they’re getting to a point where the demands of those digital experiences are now so high they need to be more product-oriented. Banks then started building APIs, and that was something different than in the Plaid or Finicity world for retail banking. On the corporate side, those aggregators don’t work. We build APIs for the corporate banking world, so that’s been the symbiotic partnership we have with banks … that’s why we have so many banks investing in us.”
The fintech is seeking to compete with legacy treasury management software providers by providing a cloud-based alternative.
“There hasn’t been a new TMS built in nearly three decades,” Turner said. “We pioneered corporate banking APIs and the only true cloud-native treasury platform in the market with meaningful scale. Now, with ATOM, we have the firepower to compete directly with the legacy incumbents.”
Although cash management is a subset of treasury management, Turner said that Trovata hadn’t built its own TMS due to its complex nature and the high expenses that come with such an undertaking.
“We’ve always kind of had our eye on it, but because of that complexity it would take a long time to build it,” he said.
Financial Sciences Corporation, founded in 1987, has already invested the needed time into the ATOM product, according to Turner.
“They’ve been handcrafting and forging this company for decades,” he said. “They’ve done an amazing job serving their customers and building something over this long period of time that really fits those needs.”