Open banking platform Plaid hauled in a massive $425m Series D funding round led by Altimeter Capital with participation from new investors Silver Lake and Ribbit Capital, pushing the firm’s valuation to $13.4bn.
Earlier investors Andreessen Horowitz, Index Ventures, Kleiner Perkins and New Enterprise Associates also added to the round.
CEO Zach Perret said the latest cash injection would help Plaid increase headcount, which already grew by 40% last year and keep pace with the escalating demand. To add on, the firm plans to develop new tools and services to support enhanced privacy, personalisation and automation.
Perret said, “We’re committed to building a secure, API-based open finance platform that helps the ecosystem meet rising consumer expectations for digital services. With this funding, we are heavily investing to accelerate our work with financial institutions to deliver consumer financial outcomes at scale.”
The new round nearly triples Plaid’s valuation a few months after a $5.3bn deal with Visa fell apart due to a legal challenge from the Department of Justice (DOJ).
The DOJ filed a civil antitrust lawsuit before the acquisition, citing that the merger would limit competition in the payments industry after which Visa and Plaid scrapped the takeover in January this year.
Plaid makes the digital infrastructure linking financial data from people’s bank accounts to the apps they use to manage their money such as Venmo, Coinbase and Expensify. Its technology connects information from 11,000 banks and financial institutions to more than 4,500 FinTech customers including PayPal, Robinhood, Google and Microsoft.
Plaid has attracted a slew of Silicon Valley and Wall Street investors including the venture investing arm of Visa, Citi, Google and Goldman Sachs. Prior to the Series D, Plaid had raised $310m in venture funding from top-tier financial investors including Visa, a16z, Goldman Sachs among others.
While coronavirus was putting uncertainty on a lot of businesses, the last 12 months for Plaid have been busy. The key reason driving the startup’s growth was the rise of online banking and increased demand for digital financial services making it an attractive segment for investors, it said.
Perret added, “A decade of gradual digitisation was punctuated by a year of sudden adoption.
“Mobile banking is no longer the realm of startups, but rather the norm for main street banks. Not only have most of our financial interactions moved to the web, but the number of people that have access to high-quality financial products has massively increased.”
“In founding Plaid nearly a decade ago, we dreamt of a financial system that was built to empower consumers and unlock financial freedom for everyone. We are humbled to watch as fintech continues to expand and improve the financial lives of billions of people worldwide.”
The fundraise was reported a few weeks ago when someone close to the company leaked the news to The Information.
Copyright © 2021 FinTech Global