Plaid, the fast-growing tech company that gathers customer account data from banks and delivers it to fintechs, seems to be drawing investor interest after its planned sale to Visa fell through. On Wednesday, Plaid announced a $425 million Series D round of funding.
This takes the San Francisco company’s total funding to about $735 million and its valuation to $13.4 billion. Altimeter Capital led the round, with participation from other new investors Silver Lake Partners and Ribbit Capital. Existing investors including Andreessen Horowitz, Index Ventures, Kleiner Perkins, New Enterprise Associates, Spark Capital and Thrive Capital also participated.
“We’re committed to building a secure, API-based open finance platform that helps the ecosystem meet rising consumer expectations for digital services,” said Zach Perret, co-founder and CEO. “With this funding, we are heavily investing to accelerate our work with financial institutions to deliver consumer financial outcomes at scale.”
In January 2020, Visa agreed to buy Plaid for $5.3 billion. In November, the U.S. Department of Justice filed a civil antitrust lawsuit to stop the acquisition, saying it raised antitrust issues. The companies called off their deal this January, leaving Plaid free to pursue an independent path.
Part of that path is taking a more conciliatory tone with financial institutions, repairing relationships with them and making them customers. For instance, the company has committed to contractually dedicating 75% of its traffic flow to APIs rather than screen scraping by the end of this year. Plaid has even floated the idea that it should be regulated by the Consumer Financial Protection Bureau. Another aspect of Plaid’s plans for its new funding is expanding its business in the U.S. and around the world.
Plaid already grew its headcount by 40% in 2020, then another 20% in the first quarter. It expects to double its employee base in 2021. It has offices in San Francisco, New York, Washington, Salt Lake City, London and Amsterdam. Plaid has 60% more customers than it did this time last year. It now has 4,500 fintech clients.
“Part of building Plaid was anticipating this shift to digital-first financial services as something that was inevitably going to happen in the same way that it had happened with retail,” said John Pitts, policy lead at Plaid. “Even at our most optimistic, we thought that full moment of transition was three to five years away. What became really evident over the last year as that process was forcibly accelerated is that we didn’t have that much time.”
Some banks are also Plaid customers. For instance, Goldman Sachs uses Plaid to link external accounts to its Marcus digital bank and gather the data needed for Marcus…