Goldman Sachs leads $44m Plaid Technologies funding round

Goldman Sachs leads $44m Plaid Technologies funding round

Goldman Sachs Investment Partners has led a $44 million funding round in Plaid Technologies, a platform that lets the likes of Venmo and Transferwise connect with their users' bank accounts.

San Francisco-based Plaid only publically launched last year but is already connected to millions of end users through contracts with firms such as OptionsHouse and NGOs like charity:water.

The startup's suite of APIs let developers connect with bank accounts, providing access to transaction data, authentication tools and analytics to reduce fraud. The firm says it will use the new money to boost its products, build up its team, support deeper integrations with financial institutions, and expand into international markets.

How banks give third parties access to customer data is a hot topic. Earlier this year JPMorgan boss Jamie Dimon warned that the increasing trend of clients allowing the likes of payment firms and aggregators to access their bank accounts "warrants special attention".

Wells Fargo recently moved to tackle the issue through a new exchange method with small business accounting software outfit Xero that uses a secure, tokenised 'handshake' between the Wells and Xero servers. The API eliminates the need for Xero customers to share their Wells Fargo usernames and passwords, and the need for Xero to store them in order to retrieve Wells Fargo account data.

Christopher Dawe, co-head, venture capital and growth equity team, Goldman Sachs Investment Partners told Bloomberg that data privacy was a key area of discussion when negotiating the Plaid deal but that "we came away from meetings feeling good about what they’re doing".

Zach Perret, CEO, Plaid, says: "The pace of innovation in financial services is just starting to ramp up, and we're excited to collaborate with financial institutions, incumbents, and new startups to build the tools that consumers and businesses need to live better financial lives. As the platform upon which thousands of applications are now built, we're excited to use this new capital to continue to scale our operations."

Comments: (0)