On the heels of Plaid's Series C announcement, our partner Mark Goldberg shares his thoughts on why Plaid is one of the most exciting companies in fintech today.
A few years back, my mother asked me to help her set up a PayPal account. What was supposed to be an easy set up turned out to be a fussy and complicated process. In order to verify her account, she was asked to confirm her bank account by identifying two tiny micropayments from PayPal a few days later, which she found confusing. Eventually, she abandoned the idea of a digital wallet and stuck to paper checks.
Today, the process for verifying bank accounts has become much simpler and more seamless. One company has driven this evolution: Plaid. Over the past few years, Plaid has built the plumbing that connects your bank account to the growing number of new fintech products and services. It’s incredibly powerful and ubiquitous. Chances are, you’re one of the tens of millions of consumers who already uses its technology.
In the past decade, the financial world has changed beyond recognition. Gone are the days when a bank was a one-stop-shop for its customers. Today, technology companies are the new financial institutions. We might use one app for budgeting, another to invest, and another for mobile cash. As the finance section of the App Store grows, banks no longer have a monopoly on your money. Plaid is becoming the technology that ties this fragmented financial ecosystem together.
Here at Index, we’ve been close observers of this important trend in fintech. Over the last few years, we’ve backed consumer applications like Robinhood and Revolut that have built transformative user experiences. With Plaid, we’re investing in the critical infrastructure that powers these products. As more innovative apps come online, the volume of connections between banks and technology companies will grow exponentially. It’s hard to say which finance apps will be on the home screen of consumers’ phones 10 years from now, but we’re confident that they will be powered by Plaid.
Like many iconic companies, Plaid’s success is a function of both a good idea and a great team. I’ve known Plaid’s founders, Zach Perret and William Hockey, for many years now, and have watched them consistently under-promise and over-deliver. That’s a rare trait in founders, and one of the reasons they’ve managed to attract some of the best talent in Silicon Valley, including many former colleagues of mine from Dropbox. When a company starts becoming a magnet for experienced, senior talent, you know something magical is happening.
By making it cheaper and easier for developers to build, Plaid is accelerating the pace of financial innovation. Plaid is one of the most powerful yet low-profile companies in the fintech sector, and we’re delighted to be co-leading their $250 million Series C.