The privately-held company raised the money to give its workers a way to gain liquidity for their share, Bloomberg News reported Thursday (Feb. 26), citing sources familiar with the matter. The report added that the exact amount raised in the round was not immediately clear.
Founded in 2013 and best known for helping people connect their data with financial institutions, Plaid has been closely watched as a candidate for an initial public offering (IPO), the Bloomberg report noted. PYMNTS has contacted Plaid for comment but has not yet received a reply.
Plaid announced last April that it had raised $575 million in new funding following a year in which the company marked what it termed a “meaningful expansion” of its suite of products.
“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 Zach Perrett wrote on the company blog in April.
The Bloomberg report said that April round valued the company at $6.1 billion, less than half of the $13.4 billion valuation it received in 2021 during a boom in FinTech investing.
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PYMNTS spoke with Perrett last year about how he views the future of the company. In five years, he wants Plaid to be known as “the analytics platform for financial services or the data platform for financial services.”
The platform concept remains crucial, but the specific products being developed are changing rapidly, driven by a need to expand finance beyond outdated, manual processes.
“The way that we think about our competition is mostly that we’re competing with paper and old processes,” Perrett told PYMNTS CEO Karen Webster.
He shared a memory of his parents applying for a mortgage by putting “all their paperwork … into a shoebox. … They took it into the bank branch … and they put it on the desk of the mortgage broker.”
Plaid aims to eliminate manual, slow processes, replacing physical data submission and human data entry with quicker, digital alternatives that speed processes like mortgage applications from weeks to potentially much faster timelines.
More recently, Plaid launched a partnership with artificial intelligence (AI)-powered banking platform Backbase.
This collaboration, announced last week, aims to tackle what the companies say is one of the biggest challenges in banking: data fragmentation that hinders both innovation and the customer experience.
