Mercury launches two cash funds with Morgan Stanley

Mercury has launched two mutual fund products with Morgan Stanley Investment Management and State Street Investment Management, exclusive to Mercury Treasury customers.

The products target startups and scaling businesses that want to earn a return on cash held on the platform while maintaining liquidity. One fund, MCRYX, is an ultra-short bond fund developed with Morgan Stanley Investment Management and is already available through Mercury Treasury.

A second product, MRGXX, is a Mercury-exclusive share class of a government money market fund from State Street Investment Management. According to Mercury, the share class has a lower expense ratio than the previous government money market fund option, allowing more yield to pass to customers.

The two funds are intended to improve net yields compared with earlier Treasury products without changing the underlying credit risk or extending duration. Startups and finance teams use mercury Treasury to manage operating cash and short-term reserves within the company's broader banking and finance platform.

Customers including ElevenLabs, Supabase, and Linear use the Treasury service. Mercury also pointed to rising venture funding as a driver of demand from early-stage companies for cash management tools that combine liquidity with returns on large balances.

Dan Kang, Chief Financial Officer at Mercury, outlined the rationale for the launch.

"Founders and finance teams shouldn't have to move money across platforms or take unnecessary risk to earn a competitive return on their cash," Kang said.

"We built these funds with Morgan Stanley Investment Management and State Street Investment Management to give our customers exclusive access to institutional-quality Treasury products directly inside Mercury," he added.

Cash demand

The move reflects a broader push by financial technology companies to deepen treasury and cash management offerings for business customers. Higher interest rates and larger venture-backed cash balances have increased scrutiny of idle funds, prompting platforms serving startups to add investment options alongside payments, cards, and operating accounts.

Global venture funding topped USD $500 billion in the first six months of 2026, according to Mercury, increasing the amount of capital young companies need to manage. For many finance teams, the challenge is balancing immediate access to cash with the need to earn a return on money not required for day-to-day operations.

MCRYX currently yields up to 3.88% through Mercury Treasury, according to the company. The fund is based on Morgan Stanley Investment Management's ultra-short strategy and sits outside the money market fund structure, meaning it carries principal risk and a floating net asset value.

By contrast, MRGXX is structured as a government money market fund share class. Mercury said that structure offers a familiar option for customers seeking liquidity while lowering fees compared with the government money market fund previously offered on the platform.

Scott Wachs, Global Head of Liquidity Product at Morgan Stanley Investment Management, described demand from startup finance teams for integrated products.

"We're seeing growing demand from startups and finance teams for cash management solutions that combine liquidity, operational simplicity, and institutional-quality investment products," Wachs said.

"We are pleased to expand our partnership with Mercury by making the MSIFT Ultra-Short Strategy Portfolio (MCRYX) available to Mercury customers," he added.

Platform expansion

The fund launch adds another layer to Mercury's effort to broaden its role with startup finance departments beyond transaction banking. The company has been building products that combine payments, cards, invoicing, bill pay, spend management, and cash monitoring in a single system.

By adding exclusive fund structures from large asset managers, Mercury is seeking to keep more customer cash within its ecosystem rather than sending businesses to separate brokers or treasury providers. The strategy also gives the company a way to differentiate itself in a crowded market for startup financial services.

State Street Investment Management said the partnership is intended to meet demand for predictable and transparent cash tools.

"More than ever, today's businesses require cash management solutions that are predictable, reliable, and transparent," said Kim Hochfeld, Senior Managing Director, Global Head of Cash, Securities Lending and Digital Assets at State Street Investment Management.

"We are thrilled to partner with Mercury, whose intuitive platform is redefining treasury management for modern companies. Combined with our cash management capabilities, this partnership will help our shared clients utilize high-quality liquidity solutions with greater transparency and operational efficiency," Hochfeld said.

Mercury also plans to introduce Treasury Ladders, a product designed to let customers allocate cash across individual US Treasury securities based on expected future needs.