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January 09, 2019 at 09:42 AM
When you link your checking account to Venmo or use it to buy Bitcoins, a startup called Plaid Inc. is likely facilitating the connection with your bank.
You punch in your user name and password; Plaid checks those credentials with the financial institution, and if they’re accurate, passes banking information back to the app. That’s it.
This kind of software has been around for decades. But in the last year, Plaid has captured investors’ attention.
The San Francisco-based startup was the subject of a bidding war among venture capitalists and at least one tech company, ultimately resulting in a $250 million investment last month. That money will partly go toward the acquisition of one of its biggest competitors.
Plaid plans to announce Tuesday that it’s buying New York-based Quovo Inc. The deal could be worth about $200 million after performance bonuses, said three people familiar with the transaction, who asked not to be identified because terms of the deal are private. The companies declined to comment.
Since starting Plaid in 2012, Zach Perret has sold the startup’s nine lines of code to some of the most popular finance apps.
Roboadviser startup Betterment LLC, cryptocurrency exchange Coinbase Inc., PayPal Holdings Inc.’s Venmo and stock-trading app Robinhood Markets Inc. have all used Plaid.
