The financing, announced in a Thursday (April 3) blog post, follows a year in which the company marked what it calls a “meaningful expansion” of its product suite.
“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 in the blog post.
“Whether it’s signing up new users, fighting fraud, enabling bank payments, or making underwriting decisions, our network is core to the way that our customers run their businesses and consumers run their financial lives.”
According to Perrett’s annual letter to shareholders, also published Thursday, new products accounted for more than 20% of Plaid’s annual recurring revenue last year, underlining the growth of the company’s alternative credit data, anti-fraud and bank payment businesses.
In addition, the letter said, Plaid has widened its client base to include “major enterprise players” such as Citi, H&R Block, Invitation Homes, and Rocket.
The letter also confirms reports from earlier this year showing the breadth of Plaid’s usage, saying that more than 1 out of 2 Americans have used Plaid.
In addition, Perrett notes some long-term trends the company is tracking, such as the ongoing digitization of financial services, and the rise of artificial intelligence (AI).
“The age of AI is upon us, and will transform every aspect of how banks operate internally and (slightly later) how consumers interact with those solutions and their finances overall,” he wrote.
According to the funding announcement, Plaid plans to use the proceeds to address employee tax withholding obligations tied to the conversion of expiring restricted stock units to shares, and “to offer some liquidity to our current team.”
The round values Plaid at $6.1 billion, according to a report from CNBC. Perrett told the network that the company was not yet ready to go public, but that this round would be Plaid’s last private fundraising until its initial public offering (IPO).
“An IPO is absolutely on our path for the coming years. We haven’t assigned a specific timeline to it,” Perret said. “We still have a lot of internal work to do. We’re not ready, which is why we didn’t consider it right now.”
