Billionaire Plaid co-founder and wife launch bank for fintechs

A billionaire co-founder of Plaid, who left the US API provider in 2019, has re-emerged as the co-founder and  co-CEO of what he believes is the first of its kind: a bank-cum-tech company aiming to revolutionise the way fintechs operate.

William Hockey has set up Column with his wife Annie Hockey, both now 32, who are co-founders and co-CEOs of Column.

The Plaid co-founder tweeted: “Today I'm publicly announcing @columnbank, the company I've been quietly building for almost three years. We're the first chartered bank built from the ground up for developers."

In a blog post, Hockey, who still owns 12 per cent of Plaid stock and is worth $1.4bn according to Forbes, continues: “Financial services needs to be consumer, developer and internet first. But in order to do this — it needs a new backbone. 

“Three years ago we set out to fix this by starting from first principles and building a bank from the ground up. 

“Column N.A. is a nationally chartered bank where we created everything in house purposely to power developers and companies building in financial services. 

“We were always told that banks can't be software companies, and until right now they have not been. We’ve built our own core, have a direct connection to the Federal Reserve, a robust balance sheet and a maniacal developer focus.

“However, having the best technology and developer experience is not enough. We have a strong balance sheet that enables us to provide capital and developer focused lending infrastructure to our clients. 

“We rethought what it means to partner from a compliance and legal perspective, and  created purpose built tools and hired a world class team who understands what it takes to enable our customers to dramatically improve financial services.”

In short, it’s a federally chartered bank-cum-tech firm whose goal is to make it easier for fintechs to offer financial services.

The couple have shelled out $50m last year to buy Northern California National Bank, a purchase which will allow Column to offer services that fintechs previously would have to get from multiple providers. 

At the moment, fintechs- and tech companies-need to work with a bank to hold deposits, a software provider to connect the bank to their own tech, and also likely a separate financial services provider to move money around.

In an interview with TechCrunch, Hockey said: “The largest pain point in building in financial services and fintech is the supply chain it’s built on. 

“There is an unnecessary separation between the chartered regulated bank and the middleware and platform companies that fintechs rely on.

“This leads to unclear responsibility and ownership [and] unnecessary costs.”

An unusual facet of Column, whose customers include Plaid and Brex, is that it is employee-funded, sidestepping the need for external funding.

Instead, Hockey, who was previously CTO and president at Plaid, has sold his Plaid stock through secondary shares to fund the 60-strong-staff Column.

Talking to Forbes, Hockey said “We haven't raised venture money, and we probably never will. 

“The hyper-growth, raise lots of money, hire as many people as possible [approach] … I don’t think that’s the right style for something like this.”

Annie Hockey previously worked in marketing at startups and was a consultant at Bain.