Plaid is a fintech software startup that provides businesses with the tools needed to develop a digitally-enabled financial system. Founded in 2012 by William Hockey and Zach Perret, the business has a mission to “...give everyone the ability to create amazing products that solve big problems.”
Through the use of application programming interfaces (APIs), the startup allows users to connect their financial accounts to a fintech app. The business is partnered with several fintech companies like Stripe Venmo, Acorns, Betterment, American Express, Truebill, Fannie Mae, and others. With its API software and partnerships with fintech companies, Plaid allows users to track their personal finances, loans, savings management, business finances, and more.
With more than 500 team members and five global office locations, the company has analyzed more than 10 billion transactions. Crunchbase data reports the fintech business has raised $734.3 million across a handful of funding rounds with investments from Goldman Sachs, Spark Capital, New Enterprise Associates, and several others.
New Financing for the Startup
In its blog announcement from today, Plaid stated that it raised $425 million in a Series D financing round led by new investors, Altimeter Capital, Silver Lake, and Ribbit Capital, along with participation from previous investors. The new funding reportedly gives Plaid a valuation of $13.4 billion.
Zach Perret, CEO and co-founder of the software startup company, told CNBC that the customer base for Plaid grew by 60% in 2020 with a headcount increase of 40%. In addition, the older generations are starting to adopt fintech services to manage spending. Perret said in an interview with CNBC, “Our market is seeing a sea change, with consumers that we never thought would be embracing digital finance engaging with it in a big way.”
In the blog post announcing Plaid’s new funding, Perret said the financing for business would be used “...to meet the increased use of fintech, expanding globally to meet international demand, and delivering an expanded set of platform products to our customers” that could potentially provide long-term success for the startup company.
The news of this new funding comes a few months after The Department of Justice (DOJ) blocked an acquisition deal between Plaid and Visa. In early 2020, Visa revealed it would be acquiring Plaid in a deal valued at $5.3 billion.
Later in November 2020, the DOJ announced it would be filing a civil antitrust lawsuit to block the deal from completing, alleging it would make Visa an even larger monopoly on debit transactions, limiting competition in the payments industry. Subsequently, in January 2021, Visa announced the merger would not be happening after all.
In regard to the Visa-Plaid deal falling through, Perret said in the press release at the time, “...While Plaid and Visa would have been a great combination, we have decided to instead work with Visa as an investor and partner so we can fully focus on building the infrastructure to support fintech.”
About the Author
McKenzie Carpenter is a graduate of Central Michigan University with a B.A.A. in Integrative Public Relations and French. McKenzie has previously worked for small businesses and nonprofit organizations.