Financial technology startup Plaid, which builds application programming interface (API) to enable seamless access to bank accounts through mobile applications, has revealed that payment giants Visa and Mastercard were among the strategic investors in the firm’s US$250 million funding round last December.
Founded by William Hockey and Zach Perret in 2012, the San Francisco-headquartered fintech startup provides companies – from startups to large-scale financial institutions – the tools and access to build financial services and applications.
Mainly through API-based technology, Plaid helps connect customers’ bank accounts to fintech apps like PayPal’s mobile payment service Venmo, stock trading app Robinhood, cross-border payments startup TransferWise, as well as digital banks like Chime. It also serves cryptocurrency clients including exchange Coinbase and wallet provider Abra.
Developers use Plaid’s APIs as a foundation to build the access to customers’ bank information and other financial data into their applications, without having to have knowledge about how to connect to and get authentication from thousands of different banking systems.
The startup claims that 80 percent of major fintech firms are relying on its APIs to connect with customers’ bank accounts, saying one in four Americans with bank accounts are served by its platform.
Plaid has raised more than US$350 million in venture capital funding to date. The December funding round saw the firm being valued at US$2.65 billion.
Andreessen Horowitz, Citigroup and Goldman Sachs are among the firm’s existing backers.
Led by venture capital firms Kleiner Perkins and Index Ventures, the firm’s previous funding round involved the participation of credit card company American Express, according to Crunchbase. And now Plaid’s CEO and co-founder Zachary Perret announced that the startup has also received backing from payment card giants Visa and Mastercard.
“We have long been inspired by the work these networks did to digitize commerce,” Perret wrote in a blog post. “We look forward to collaborating on products that lie at the intersection of commerce and financial services.”
The financial terms of Visa and Mastercard’s investments were not disclosed in the announcement.
Bill Sheedy, executive vice president of Visa’s strategy group, told Fortune that with the investment, Visa will be working with Plaid to enhance payment experiences globally.
“The alignment with Plaid’s target customers, and what they’re doing in terms of building value-added services on top of financial data, seems like a strong strategic move [for Visa].”
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