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Namely, its largest fundraise to date: the San Francisco-based company, which enables companies to create their own financial services applications without investing in a team of engineers, announced a $425 million Series D round of funding on Wednesday.
Altimeter Capital led the round and was joined by new investors Silver Lake Partners and Ribbit Capital, as well as existing investors, including Andreessen Horowitz, Index Ventures, Kleiner Perkins, New Enterprise Associates, Spark Capital and Thrive Capital.
The new round gives Plaid $734.3 million in total known funding since the company was founded by Zach Perret and William Hockey in 2012, according to Crunchbase data. The company’s last raise was a $250 million Series C round in 2018, led by Index and Kleiner Perkins.
Driving the new funding was the shift to digital financial services by consumers who couldn’t physically walk into a bank branch for the past year and instead became comfortable banking online, Plaid co-founder and CEO Perret told Crunchbase News.
“We always expected the shift to online, but not the pace that it happened in 2020,” Perret said. “Financial services shifted completely online in its usage, growth and reliance by consumers. Seventy-five percent of consumers are saying it is the new normal for them. We want to continue to scale our business and team to serve those offerings now. It was a great time to raise funding and reinvest in the platform and digital finance as we look ahead to the future.”
Plaid aims to be a one-stop shop for digital finance developers, so the new funding will go toward scaling its platform and growing its team of 700. It plans to increase headcount by 50 percent this year and currently has more than 100 open roles.
In the first quarter of this year alone, Plaid’s employee base grew 20 percent, and Perret expects more continued growth across the company’s offices in San Francisco, New York, Salt Lake City, Washington, D.C., Amsterdam and London.
As digital finance becomes more broad, the company is looking at new use cases, including embedded finance, Perret said. More financial transactions are moving online, such as applying for a mortgage, moving money from paychecks and paying friends.
He considers the first wave to be companies, such as Venmo and Robinhood, which created entirely new products or form factors. The second wave were banks leveraging online capabilities for better customer experiences.
“Now, large companies, like the Googles and Microsofts are focused on launching financial products,” he added. “Reward cards and the concept of embedded finance being delivered by financial and non-financial companies is leading to massive growth of the industry.”
Plaid CEO on Visa
Speaking about the merger with Visa being called off amid antitrust scrutiny of the transaction by the U.S. federal government, Perret called the merger opportunity with Visa “a very unique situation.” Perret said he still respects Visa and learned a lot interacting from interacting with the finance giant’s team.
He went on to say that Plaid is “incredibly unlikely to consider another merger,” and instead is focused on creating an “iconic, long-standing company.”
“The financial future we see is unlocked for everyone,” Perret added. “We aim to increase access and product quality for consumers, and while our growth has been exciting, we have a long way to go and are just getting started.”
What investors have to say
Rick Yang, general partner and head of consumer at NEA, said the firm has been along for the ride with Plaid since joining its seed round in 2013. The market around the company has accelerated in the sense that the phrase “everyone is becoming a fintech” is true, he said in an interview.
“This company always continues to grow quickly and has a vast opportunity in front of it,” Yang said. “Whether that means from an international perspective, on the payroll side or using the financial data that is out there to build interesting products. Plaid has a view on that, and customers are thinking about that, too, and we want to capitalize on that. That is what this funding allows them to do.”
Photo of Zach Perret, co-founder and CEO of Plaid, courtesy of the company.
Blogroll illustration: Li-Anne Dias
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