plaid

There has been an explosion of multiple payment apps in the past couple of years, to be more precise, last two years. These apps have made it easy for all of us on how to manage our finances and bank accounts, making us able to send and receive money from and into our bank accounts in just a few taps on our smartphone. But is it that easy to do all of these processes? It looks like but is definitely not. These companies create an infrastructure to connect the banks with the app or use a ready-made API for the same. Plaid is one of the companies which creates those APIs for the app makers who then can connect the banks through their apps and provide financial services to their customers.

Plaid was founded by Zach Perret and William Hockey in 2012. Perret is a Duke University pass out with a bachelor’s degree in Science, and William has a degree in Computer Science from Emory University. The two worked at Bain & Company, Perret as a consultant and Hockey as an associate. The two met at work and gelled well due to their common interest, i.e. coding. While working at the company, they discussed ideas for a new startup and started working on some. And, in 2012 finally left their job to start their own business. They moved to New York and spent over eighteen months to conceive the right idea.

Like every other startup founders, it was not their first startup. Before Plaid they had tried their hands on various consumer-based products as well, but none of them worked. Once, they decided to create an app for connecting bank accounts and do the transaction. But it was again a failure.

So they decided to create an infrastructure for connecting the apps and the banks altogether, like a pipeline, moving their focus from consumer-based products. Following that, the two created personal financial management and tracking tool for consumers and named it Sliver. Later, the product was renamed as Rambler, which later won the $5,000 grand prize at the TechCrunch Disrupt NY Hackathon as a winner in 2013. It was the first time that a team made a full-scale financial services application live within 24 hours.

With Rambler, the two co-founded Plaid, an application programming interface, or API, that would do almost every type of banking work, like generating PDFs for the transaction and connecting the banks, just by using a bank customer’s online user name and password. The two moved to San Fransisco to set up an office and join more engineers to work on the product. Along with that, they started looking for investors and got rejected more than 50 times.

Finally, in July 2013, the company was able to raise a $2.9 million in a seed round led by Spark Capital. Later, the company raised a $60 million in Series A and Series B funding. Since then, the company has been growing in every which way. Within two years, the startup idea took the two co-founders of Plaid into the list of Forbes’ 30 Under 30 list in 2015.

According to Plaid, as of December 2018, 25 per cent of people in the United States having a bank account had connected to Plaid through an app. It was a fair increase of 13 per cent in 2017.

In 2019, the company raised a $250 million Series C investment and valued at a $2.65 billion. In total, the company has raised a $310 million investment from names like Andreessen Horowitz, Index Ventures, Norwest Venture Partners, Goldman Sachs, NEA, Spark Capital, etc.

Today, more than 15,000 banks are connected through various apps with the Plaid infrastructure and extend to thousands of apps, including Venmo, Robinhood, Coinbase, Acorns and LendingClub.