The archive · Money & Fintech · Strategic decision · 2013–2015
Standard Treasury Joins Silicon Valley Bank After Its Own-Bank Bet Failed
Standard Treasury built banking APIs for commercial clients, then bet it needed its own bank; a failed Series A ended with Silicon Valley Bank acquiring it.
Standard Treasury
What the business is
Standard Treasury built secure REST APIs, a developer dashboard, SDKs and AML/fraud tooling so commercial clients could connect with their financial institutions programmatically.
How it started
Zac Townsend and Dan Kimerling founded Standard Treasury in 2013, convinced that APIs would become the dominant way commercial clients connect with their financial institutions. They said they worked with leading banks in the US and Europe on opening APIs and studied how hundreds of startups consume banking services, believing secure RESTful interfaces would dramatically improve business processes.
What happened
In 2014 the pair concluded that the only way to bring the vision to life was to build their own bank. In early 2015, primarily because of regulatory and geographic risk concerns, they could not raise a Series A against that goal. With that door closed they chose to align with a single bank, and Silicon Valley Bank — a partner since almost the very beginning — approached them about being acquired. The deal covered the payments and account-information APIs, developer dashboard, SDKs, and AML and fraud-detection tools the team had built and refined in private user sessions.
How it ended up
Silicon Valley Bank acquired Standard Treasury's assets and team in August 2015. The founders announced it in a blog post that drew a 106-point, 31-comment Hacker News discussion on 2015-08-06, and the team joined SVB to adapt the products to the bank's context and launch them.
Background
Standard Treasury, founded around 2013 by Zac Townsend and Dan Kimerling, bet that APIs would become the dominant way commercial clients connect with their financial institutions. The startup said it worked with leading banks in the US and Europe to open APIs, studied how hundreds of startups consume banking services, and built its own products: payments and account-information APIs, a developer dashboard, SDKs, and AML and fraud-detection tooling.
In 2014 the founders decided that realizing the vision required building their own bank. A year later that escalation collided with the funding market: largely because of regulatory and geographic risk, they could not raise a Series A against the plan. Rather than give up, they chose to align with a single bank, and Silicon Valley Bank, a partner since nearly the beginning, approached them about being acquired.
SVB acquired Standard Treasury's assets and team in August 2015. The founders announced the deal in a blog post that drew a 106-point, 31-comment Hacker News thread on 2015-08-06, with commenters split between those who respected the honesty about the failed bank plan and those who wished the startup had stayed a middleware vendor. The team joined SVB to turn its API products into bank services, ending the startup's run as an independent company.
What has to be true
- APIs were genuinely becoming the interface to banking services, so the founding bet looked right: banks wanted open APIs and startups wanted programmatic access to their money movement.
- The founders escalated from middleware to owning a bank because they believed only a bank could deliver the richer, more full-featured API-based services they envisioned.
- The own-bank plan changed the capital equation: investors balked at regulatory and geographic risk, and no Series A came together in early 2015.
- SVB had backed the company since almost the beginning, so when the funding door closed, acquisition by SVB was the fastest credible route to the same vision rather than a random exit.
What can be applied
When your endgame needs regulated infrastructure you don't own, investors' risk appetite is the real gate — a partner with the charter you lack can be the fastest route to the same vision.
Aftermath
As of 2015-08-06 Standard Treasury no longer operated as an independent company: Silicon Valley Bank had acquired its assets and team, and the founders said they were looking forward to transforming the payments and account APIs, developer dashboard, SDKs and fraud tooling for the SVB context and launching versions of them. This record ends at the announcement; the source material captures no later outcome for the products inside SVB.
Sources
- Standard Treasury Joins Silicon Valley Bank
- Standard Treasury Acquired by Silicon Valley Bank — Hacker News discussion
spotted an error? The archive wants to know.
Your turn
You just read one. Describe what you are building, and see who is betting on the same thing.
Free account · 3 free questions · no card