Stripe’s first employee, the founder of fintech Increase, sort of bought a bank

In a significant move within the fintech sector, Darragh Buckley, the founder and CEO of Increase, has successfully acquired a substantial share of Twin City Bank. This transaction, which triggered a public disclosure by the Federal Research Board, marks a notable milestone in Buckley’s long-standing ambition to invest in a banking institution. Located in Longview, Washington, about an hour from Portland, Oregon, Twin City Bank is a small community bank. Although Buckley has confirmed the deal, he has refrained from disclosing the exact percentage of his stake. It is understood that his investment exceeds 10%, making him a major shareholder, though he is not the sole owner. This move aligns with the assumptions in the industry that Buckley aims to leverage the bank to advance the goals of Increase, his banking-as-a-service (BaaS) startup. Interestingly, Buckley's investment has attracted the attention of a rival entity, which reportedly attempted to orchestrate negative press coverage against him. However, Buckley clarified that this is not his first investment in a Washington community bank and that his motivations are not what some competitors might assume. He emphasized that Twin City Bank will continue to focus on its community roots and will not become a direct partner for Increase. Increase specializes in providing an API platform that enables financial services to be delivered programmatically, handling operations such as ACH transactions and real-time payments. The company works primarily with other fintechs, including Ramp and Pipe, and collaborates with FDIC-insured banks to offer compliant services. Buckley’s reputation in the fintech space, bolstered by his background as Stripe’s first employee, has led some competitors to refer clients to Increase when they are unable to manage certain tasks. The competitive landscape of BaaS has prompted some firms to consider acquiring small community banks to bypass traditional banking partnerships, following the example set by other industry leaders. Despite the competitive pressure, Buckley insists his interest in Twin City Bank stems from a genuine appreciation for community banking, which he believes is often underestimated in terms of growth potential. He stated that community banks thrive on relationships and local knowledge. As Buckley continues to navigate this venture, the industry will be keenly observing any shifts in his strategy. Meanwhile, he has already secured the FDIC’s approval for his investment, confirming that the deal has been finalized.