Digital finance platform Plaid has announced it has raised $575 million in new funding.
The financing follows a year in which the company achieved what it describes as a “meaningful expansion” of its product suite.
“Plaid has evolved from a business solely focused on bank linking, into a suite of data analytics products that are essential to financial services and adjacent markets,”
Co-founder and CEO Zachary Perrett wrote in the blog post.
“Whether it’s signing up new users, fighting fraud, enabling bank payments, or making underwriting decisions, our network is core to the way that our customers run their businesses and consumers run their financial lives.”
According to Perrett’s annual letter to shareholders, new products accounted for more than 20% of Plaid’s annual recurring revenue last year, highlighting the growth of the company’s alternative credit data, anti-fraud, and bank payment businesses.
The letter also mentions that Plaid has expanded its client base to include “major enterprise players” such as Citi, H&R Block, Invitation Homes, and Rocket.
The letter further confirms earlier reports regarding the widespread use of Plaid, stating that more than half of Americans have used the platform.
Perrett also highlighted several long-term trends the company is tracking, such as the continued digitisation of financial services and the rise of AI.
“The age of AI is upon us, and will transform every aspect of how banks operate internally and (slightly later) how consumers interact with those solutions and their finances overall,”
he wrote.
According to the funding announcement, Plaid intends to use the proceeds to address employee tax withholding obligations linked to the conversion of expiring restricted stock units to shares, and “to offer some liquidity to our current team.”
This funding round values Plaid at US$6.1 billion, according to a report from CNBC.
Perrett told the network that the company is not yet ready to go public, but that this round will be Plaid’s last private fundraising before its IPO.
“An IPO is absolutely on our path for the coming years. We haven’t assigned a specific timeline to it,”
Perrett said.
“We still have a lot of internal work to do. We’re not ready, which is why we didn’t consider it right now.”
Featured image credit: edited from freepik
