There’s a new unicorn in the fintech space, as Plaid announced this week that it raised $250 million in its Series C funding round at a reported valuation of $2.65 billion.
Plaid, a technology platform that connects various applications with users’ bank accounts, has a growing presence in the mortgage space, as the company's head of mortgage Kate Adamson discussed with HousingWire earlier this year. Also, Fannie Mae recently approved Plaid’s asset verification program to be used within Fannie Mae’s Day 1 Certainty program.
And now, the company plans to grow exponentially thanks to a massive new capital injection.
TechCrunch reported Tuesday that venture capitalist Mary Meeker led the funding round, with participation from Andreessen Horowitz, Index Ventures, Norwest Venture Partners, and Coatue Management, along with existing investors Goldman Sachs, NEA, and Spark Capital.
TechCrunch also reported on Plaid’s reported valuation, which places the company squarely in unicorn status, a term for privately held startups that are valued at more than $1 billion.
In a blog about the capital raise, the company’s founders, Zach Perret and William Hockey, said that they plan to use the money to expand.
“Today, we’re excited to announce that we’ve raised a $250M Series C to reinvest in the fintech ecosystem. With it, we’re planning to grow the team and expand our operations,” Perret and Hockey write in the blog. “We’re focused on shipping and scaling products that will both serve the growth and scale of these customers, and become the foundation for fintech for decades to come.”
As Perret and Hockey note, much of the financial services industry is becoming much more digital, and Plaid plans to be at the forefront of that ongoing transistion, including in the mortgage business.
“The coming years will continue to bring major changes to the financial ecosystem. As digitization simplifies financial products, banking services are becoming increasingly self-contained and embeddable,” Perret and Hockey write.
“Instead of visiting a bank branch to get a loan, consumers can now apply for a mortgage via their phone as they search for a home. Indeed, many companies—for example, those in the sharing economy—consider embedded banking products to be a key differentiator for their hosts, drivers, sellers, and suppliers. Every company is becoming a fintech company,” they continue. “Plaid’s role is to empower these innovators with a platform—and a data network—that delivers access to the financial system.”
As part of the funding round, Meeker will be joining the company’s board. According to the TechCrunch report, the money Meeker used to invest in Plaid came from Kleiner Perkins, the venture capital firm that Meeker is reportedly set to leave soon.
“We feel fortunate to power thousands of companies that have completely reshaped the way Americans live their financial lives. Their innovation has made financial services markedly more accessible and empowering than ever before,” Perret and Hockey conclude. “Yet, we’ve only just begun the fintech journey. We’re looking forward to this next chapter as we work to make money easier for everyone.”