Data aggregator Plaid raises $250 million for expansion
What do Robinhood, Betterment, Acorns, Venmo and Coinbase have in common?
They are all fintechs powered by Plaid. The San Francisco data aggregator has quietly become the leader in building information connections between fintechs and banks, said Mark Goldberg, partner at Index Ventures, one of Plaid's newest investors.
“I meet with hundreds of consumer finance companies every year, and it just felt like every one of them was a customer of Plaid,” Goldberg said.
Index Ventures joined Andreessen Horowitz and lead investor Mary Meeker from Kleiner Perkins in a $250 million Series C funding round, Plaid announced Tuesday. The aggregator plans to use the funds to accelerate hiring and scale up products and operations. The company has more than 175 full-time employees in three offices: its San Francisco headquarters and in New York and Salt Lake City. Plaid declined to comment for this story.
“As digitization simplifies financial products, banking services are becoming increasingly self-contained and embeddable,” co-founders Zach Perret and William Hockey wrote in a blog entry on Plaid’s site. “Plaid’s role is to empower these innovators with a platform — and a data network — that delivers access to the financial system.”
Plaid has raised $309.3 million, according to Crunchbase. Its application programming interface products are intended to help fintechs and financial institutions curb risk, prevent fraud and streamline transactions. Plaid moves data involving a quarter of U.S. bank and credit union account holders, up from 13% last year, the company says.
“They provide APIs to developers so instead of having to build integrations into [JPMorgan] Chase and Wells Fargo and the next 10,000 banks, you can ... have a quick line of code to integrate into anyone’s traditional financial institution,” Goldberg said.
In May, Plaid expanded into Canada. Goldberg predicts that the company could spend some of its new venture funding on international expansion.
“It’s not a U.S. problem that they’re solving, it’s a global one,” Goldberg said. “There’s still a huge need for someone like Plaid in Europe and other places.”