Annie Hockey and her husband William bought a small bank in Chico last year and are now attempting to leverage its charter to build a backbone for the booming fintech sector.
The Hockeys are practically fintech royalty: William was a co-founder of Plaid, a B2B financial services company currently valued north of $13 billion, while Annie worked for some of finance's biggest players, including Goldman Sachs and Bain Capital.
On Thursday, they rebranded the Northern California National Bank they bought for about $50 million to Column, an "infrastructure bank" that aims to offer services to growing fintechs and cut out the complicated network of middlemen that many rely on to operate.
Fintechs without banking charters must rely on banks to hold customer money and issue debit cards. Some larger fintechs are taking the plunge to become full banks to offer a full ranges of services, but it can be an expensive and time-consuming process that isn't available to all.
"If you are a fintech and want to charter with a bank there are a lot of third-party firms in the mix," Annie Hockey said. "This can be inefficient and expensive and if we can compress the tech stack into one party, we can enable these companies to launch more quickly and be a partner along the way."
The company has 65 employees and an office in the Presidio. It still operates the small brick-and-mortar bank in Chico and continues to offer regular services to its retail customers.
But its new ideal clients are fintechs large and small. It currently offers its services to companies like Brex, Point, Oxygen and, of course, Plaid. Annie says the company is already profitable.
"It is our goal to fundamentally change the fintech ecosystem," she said. "If you have a great idea for fintech tools that are not in the market we want to partner with you. If you are a 23-year-old starting a fintech company to partner to find an institution to partner with you usually need $5 million in the bank with enough runway and an enormous team, and it's really an unequal barrier to entry."
As an infrastructure bank, Column works with developers to offer APIs allowing for wire transfers, automated bank account openings and lending services.
The company is also adamant about not taking VC money. It is wholly owned by the Hockeys, and the purchase of the original bank was financed by selling off Plaid shares.
"We have seen the model of raising a ton of cash and scaling really quickly," Annie said. "We're not knocking the model, but here we don't have to worry about liquidity events and growth metrics and can make every decision for long term success."
