Plaid, Inc. is an American financial services company based in San Francisco, California. The company builds a data transfer network that powers fintech and digital finance products.
 Logo since 2013 | |
| Company type | Private |
|---|---|
| Industry | Financial technology and services |
| Founded | May 2013 |
| Founders |
|
| Headquarters | San Francisco, California, US |
Number of locations | 7 countries (US, Canada, UK, France, Spain, Ireland, Netherlands) |
Key people |
|
| Products | Transactions, Auth, Balance, Identity, Assets, Investments, Liabilities, Payment Initiation, Income, Monitor |
| Revenue |  US$170 million[1] (2020) |
Number of employees | 1,200[2] |
| Website | plaid |
Plaid's product, a technology platform, enables applications to connect with users’ bank accounts.[3] It allows consumers and businesses to interact with their bank accounts, check balances, and make payments through different financial technology applications.[4] The company operates in the US, Canada, the UK, France, Spain, Ireland, and the Netherlands.[5]
History
editPlaid was founded in 2013 by Zach Perret and William Hockey.[6] The pair originally attempted to build consumer financial management products, including budgeting and bookkeeping software.[7] When confronted with difficulties in connecting bank accounts required for these tools, they decided to pivot their core business focus to a unified banking API.[8]
On January 13, 2020, Visa announced it intended to acquire Plaid for $5.3 billion.[9] Visa CEO Alfred Kelly described the acquisition bid as an "insurance policy" to neutralize a "threat to our important US debit business."[10] Visa later abandoned the deal after the United States Department of Justice sued to block it for antitrust reasons.[11][12]
Services
editPlaid builds a data transfer network that powers Fintech and digital finance products. From the consumer side, this means they allow common apps such as Venmo and Chime to offer banking services without having to develop all the infrastructure themselves.[13] For immediate linking of their bank funds, users of the apps are required to share their bank login credentials with Plaid.[14] For some banks, Plaid will not receive user credentials and instead users will authorize access to bank data through their bank's portal.[15][16]
In October 2020, Plaid announced the "all-new Plaid Link" to reduce the steps necessary to connect financial products.[17]
The company added an instant payout feature based on the Real Time Payments (RTP) network to the Plaid Transfer product in April 2023. The service lets businesses disburse loan payments, payout insurance or wages in real-time.[18]
Funding
editIn late 2013, Plaid raised a $2.8 million seed round from Spark Capital, Google Ventures, and New Enterprise Associates. In 2014, Plaid raised $12.5 million from New Enterprise Associates.[19]
On December 11, 2018, the company announced a $250 million Series C round with a valuation of $2.65 billion. The funding round was led by Mary Meeker, with Andreessen Horowitz and Index Ventures joining as new investors. Former backers Goldman Sachs, NEA and Spark Capital also participated.[20] Plaid later stated that both Visa and Mastercard had invested in the round.[21]
On April 7, 2021, Plaid raised a $425 million Series D at a valuation of $13.4 billion.[22][23]
| Round | Date | Lead Investor | Amount Raised | Valuation |
|---|---|---|---|---|
| Seed | September 19, 2013 | Spark Capital | $2.8 million | — |
| Series A | November 15, 2014 | New Enterprise Associates | $12.5 million | — |
| Series B | June 19, 2016 | Goldman Sachs Investment Partners | $44 million | — |
| Series C | December 11, 2018 | Mary Meeker, Index Ventures, Andreessen Horowitz | $250 million | $2.65 billion |
| Series D | April 7, 2021 | Altimeter Capital | $425 million | $13.4 billion |
Acquisitions
editIn January 2019, Plaid acquired competitor Quovo for $200 million.[24]
In January 2022, Plaid announced it had acquired the identity verification and compliance platform Cognito for an undisclosed sum.[25]
Controversies
editThe company has faced controversy for scraping user data, impersonating bank login screens, and not properly disclosing the privacy risks associated with the service.[26] TD Bank filed a lawsuit against Plaid in 2020 accusing the company of trying to "dupe" its users.[27]
In 2021, Plaid settled a $58 million class action lawsuit over claims that it passed on personal banking data to third party firms without user consent. The settlement encompasses five separate lawsuits combined as one. Each claims that Plaid used consumers’ banking login credentials to gather and distribute detailed financial data without prior consent.[28]
Plaid has "exploited its position as middleman," the plaintiffs alleged. Approximately 98 million people are affected by the settlement. Claimants will be given the option to receive the settlement money automatically through payment platforms such as PayPal and Venmo.
See also
editReferences
edit- ^ Kauflin, Jeff; Konrad, Alex (April 7, 2021). "Plaid's $13.4 Billion Valuation Makes Its Founders Fintech's Newest Billionaires". Forbes. Archived from the original on April 7, 2021.
- ^ "Plaid | Company Overview & News". Forbes.
- ^ "Plaid – Press". plaid.com. Retrieved May 31, 2017.
- ^ "6 Fintechs Disrupting The Industry". Inc.com. January 26, 2017. Retrieved May 31, 2017.
- ^ "Every company is a fintech company". Fortune. Retrieved March 22, 2020.
- ^ "Fresh off a $2.65B valuation, Plaid co-founder William Hockey is leaving". TechCrunch. Retrieved March 22, 2020.
- ^ Velazco, Chris (April 28, 2013). "Rambler Takes Home The Disrupt NY 2013 Hackathon Grand Prize, Learn To Drive And Radical Are Runners Up | TechCrunch". Retrieved May 31, 2017.
- ^ Ha, Anthony (September 19, 2013). "Plaid Raises $2.8M To Make Banking Data More Developer Friendly | TechCrunch". Retrieved May 31, 2017.
- ^ Andriotis, Cara Lombardo and AnnaMaria (January 14, 2020). "Visa to Pay $5.3 Billion for Fintech Startup". Wall Street Journal. ISSN 0099-9660. Retrieved January 28, 2020.
- ^ Bursztynsky, Jessica (January 12, 2021). "Visa abandons takeover of Plaid after DOJ raises antitrust concerns". CNBC. Retrieved January 13, 2021.
- ^ Editorial Board (December 3, 2020). "Opinion | Visa Is Doing What Big American Companies Do to 'Protect This Business'". The New York Times. Retrieved December 5, 2020.
- ^ "Visa and Plaid Abandon Merger After Antitrust Division's Suit to Block". www.justice.gov. January 12, 2021. Retrieved January 13, 2021.
- ^ "What is Plaid? | Plaid". plaid.com. Retrieved October 23, 2020.
- ^ "Is It Safe to Give an App Your Bank Password?". July 17, 2018.
- ^ "Plaid Signs Data Agreement with JPMorgan Chase".
- ^ "Plaid and U.S. Bank agree to share bank customer data through an API". May 13, 2021.
- ^ PYMNTS (October 2, 2020). "Plaid Unveils New Link To Enhance Onboarding". PYMNTS.com. Retrieved October 23, 2020.
- ^ Mason, Emily (April 13, 2023). "Plaid Launches New Feature To Speed Up Bank Payments". Forbes. Archived from the original on April 14, 2023.
- ^ Schubarth, Cromwell (January 14, 2020). "Here are the Plaid investors who won big in its $5.3B sale to Visa". Silicon Valley Business Journal. Retrieved July 5, 2022.
- ^ Rooney, Kate (December 11, 2018). "Plaid's $250 million funding round propels it to $2.7 billion valuation". CNBC. Retrieved December 12, 2018.
- ^ Miller, Ron (September 16, 2019). "Plaid announces strategic investment from Mastercard and Visa". TechCrunch. Retrieved March 22, 2020.
- ^ "Plaid Inc". 美股之家. April 14, 2021.
- ^ Wilhelm, Alex (April 7, 2021). "Plaid raises $425M Series D from Altimeter as it charts a post-Visa future". Techcrunch.
- ^ Tesfaye, Mekebeb. "Plaid snags API competitor Quovo for $200 million". Business Insider. Retrieved January 25, 2020.
- ^ McCurdy, Will (January 20, 2022). "Plaid acquires compliance platform Cognito". FStech. Retrieved January 20, 2022.
- ^ B, Seanie (August 27, 2020). "About every 9 months I forget why I don't use".
- ^ Deschamps, Tara (October 14, 2020). "TD Bank files lawsuit against Plaid, accusing it of trying to "dupe" consumers". CTVNews. Retrieved January 13, 2021.
- ^ "Plaid settles class-action lawsuit for $58 million". August 6, 2021.