Logging In to Your Bank Account Is Now a $3 Billion Business
- Plaid is buying Quovo in a deal that could reach $200 million
- Last year, Plaid sparked a bidding war among Square and VCs
The Paypal Holdings Inc. Venmo app.
Photographer: Andrew Harrer/Bloomberg
When you link your checking account to Venmo or use it to buy Bitcoins, a startup called Plaid Inc. is likely facilitating the connection with your bank. You punch in your user name and password; Plaid checks those credentials with the financial institution and if they’re accurate, passes banking information back to the app. That’s it.
This kind of software has been around for decades. But in the last year, Plaid has captured investors’ attention. The San Francisco-based startup was the subject of a bidding war among venture capitalists and at least one tech company, ultimately resulting in a $250 million investment last month. That money will partly go toward the acquisition of one of its biggest competitors.