
▼ Summary
– Darragh Buckley, CEO of fintech startup Increase, purchased a stake exceeding 10% in Twin City Bank, triggering a Federal Reserve disclosure but declined to reveal the exact size.
– Industry sources speculated Buckley’s investment aimed to support Increase’s banking-as-a-service (BaaS) ambitions, though he denied plans to integrate the bank with his company.
– A competitor allegedly tried to block the deal by pitching negative press, but Buckley clarified this was his third investment in a Washington community bank.
– Unlike other BaaS firms that buy banks to bypass partnerships, Buckley emphasized Twin City would remain community-focused and avoid risky fintech collaborations.
– Buckley defended community banks’ potential, stating their strength lies in relationships and knowledge, while confirming FDIC approval for his stake had been secured.
Darragh Buckley, Stripe’s first employee and founder of fintech startup Increase, has made waves by acquiring a significant stake in Twin City Bank, a small community bank in Washington. The move, which required federal disclosure due to the size of the investment, marks a strategic play in the competitive banking-as-a-service (BaaS) sector. While Buckley remains tight-lipped about the exact percentage, industry insiders speculate the stake exceeds 10%, positioning him as a major shareholder.
The acquisition fuels speculation about Buckley’s long-term plans for Increase, a fintech platform that enables other companies to embed financial services via APIs. Unlike competitors who’ve purchased banks to streamline operations, Buckley insists Twin City will remain independent, focusing on its community roots rather than becoming a fintech partner. “This isn’t about Increase owning the bank,” he clarified. “Twin City’s mission stays unchanged.”
The fintech world has seen similar moves before. Plaid co-founder William Hockey bought Northern California National Bank in 2021 for his startup Column, while former Block executives acquired Lead Bank in Kansas City. These acquisitions highlight a growing trend: fintechs bypassing traditional partnerships by owning banks outright. Yet Buckley’s approach diverges, he sees value in community banks’ local expertise, dismissing the notion that they can’t thrive independently.
Behind the scenes, the deal faced unexpected resistance. An unidentified competitor allegedly hired a PR firm to plant negative stories, though Buckley brushed it off. He revealed this was his third investment in a Washington community bank, emphasizing his broader interest in supporting smaller institutions. Regulatory hurdles were cleared with FDIC approval, finalizing the transaction.
The risks of fintech-bank partnerships loom large. Evolve Bank’s recent ransomware attack and regulatory scrutiny serve as cautionary tales. Buckley acknowledges the dangers of sponsor banking, where banks partner with fintechs, stressing that only specialized institutions should take on such risks. Twin City, he insists, won’t follow that path.
For now, Buckley’s focus is on preserving Twin City’s identity. Whether his stance shifts remains to be seen, but one thing is certain: the fintech industry will be watching closely. With the deal sealed and regulators on board, his vision for community banking is now in motion.
(Source: TechCrunch)