YC Startup Standard Treasury Is Helping Banks Instead Of Killing Them, And It's Nearing A $12 Million Annual Run Rate

There's no shortage of payment startups trying to disrupt banks. From Simple to Dowalla to Square and Balance, startups are doing just about everything they can to work around the slow-moving entities instead of with them.

Dan Kimerling and Zac Townsend are taking a different approach, and they expect to be handsomely rewarded by banks for it. The pair met at Harvard summer school when they were 16 and now they're working together in a different summer program, startup accelerator Y Combinator. The former Giftly COO and Stripe risk employee respectively have founded Standard Treasury, an API for banks. They help developers include banking functions such as electronic checks (ACH), foreign exchanges, rate-quoting, and more in their apps and websites.

It's an enterprise play, and the pair are running paid pilot programs with a handful of banks. The banks, the founders say, will pay anywhere between $100,000 and $500,000 per month for the service, and they're trying to sign banks up for two-year contracts. Even thought there isn't a large pool of banking clients to onboard (Kimerling estimates there are 7,900 banks in the United States but only about 50 which could be potential clients), it'd be enough money for a small operation to more than reach profitability. Kimerling and Townsend say they expect to reach a $12 million annual run rate by year end.

Both founders already have good track records in Silicon Valley and Standard Treasury has a direct path to revenue. So why do they need to be in an accelerator program which will take a percentage of their company?

"For us it's a lot about the focus," the pair say of joining Y Combinator. They also say the powerful YC alumni network, which includes "graduates" such as Airbnb and Dropbox, is extremely beneficial.

Beyond the $80,000 they were given upon entering Y Combinator, Kimerling and Townsend aren't sure they'll raise more money. "When you have contracts between $1 and $5 million a year, what are you raising money for?" they ask.