Plaid Buys ID Verifier Cognito

identity verification

Identity verification and compliance service Cognito has been acquired by Plaid, the company’s CEO announced Thursday (Jan. 20).

“Plaid Link is nearly ubiquitous across the fintech ecosystem because it does a fantastic job at abstracting over the thousands of banking providers every company needs to support,” wrote Alan Meier on the company blog.

“The identity and compliance story that immediately follows connecting a bank account is still, comparatively, quite fragmented and home rolled.”

Terms of the deal were not disclosed, although a TechCrunch report put the price tag at $250 million.

Read more: Plaid’s ‘Ecosystem of Payment Partners’ Shows Breadth of Open Banking

Cognito’s platform offers a mix of automating identity verification, know your customer (KYC) and anti-money laundering (AML) screening that lets digital financial apps onboard customers while reducing fraud.

“With Cognito, the next major step in our journey is to help developers build the best and most seamless onboarding experiences across all of these areas,” Plaid said on its blog.

“This means simplifying every step of the consumer journey from their first interaction during signup, to the first magical moment delivered by that product — the first time sending money to a friend, or the first time trading a stock or cryptocurrency.”

Plaid says it aims to combine its experience in connecting people to financial apps wit Cognito’s identity and compliance expertise “to help make the onramps to digital finance easier, safer and more accessible for everyone.”

Meier said Cognito’s trajectory since its founding in 2013 — from outsiders to a firm with a “crisp and confident vision” — makes Plaid the perfect home for the company.

“Plaid believes in our vision to drastically reduce the overhead of onboarding customers for all fintech applications. With Plaid backing us, we will continue to build amazing products for years to come,” he said.

Meier closed by reassuring customers that Cognito’s products will not go away, although they will “continue to work, evolve, and improve.”