Plaid Acquires Competitor Quovo
The FinTech firm Plaid has reportedly purchased rival startup Quovo in what amounts to the company’s first major acquisition. According to CNBC sources, the deal was valued at just under $200 million, although terms were not officially made public. This news comes just a few weeks after Plaid raised $250 million in a funding round that valued them at a $2.7 billion.
Those who have used apps such as Bumped or Qapital and linked a bank account have likely interacted with Plaid’s product whether or not they knew it. The company’s claim to fame is allowing FinTech app creators to utilize transaction data from users’ bank accounts. In fact in December the company announced that one-quarter of Americans with bank accounts had connected an account to a separate app via Plaid’s API.
Meanwhile Quovo was largely in the same line of business as Plaid. However the company has a stronger focus on brokerage data, with SoFi and Betterment counted among Quovo’s clients. In a blog post announcing the acquisition, Plaid co-founders Zach Perret and William Hockey acknowledged this difference between the two companies, writing, “Financial applications have historically used Plaid primarily to interact with checking and savings accounts. In acquiring Quovo, we are extending our capabilities to a wider class of assets.” The duo continued, “Our goal is to make money easier for everyone, and doing so requires that we consider consumers’ financial lives holistically. We’re excited to work with the Quovo team to enable this.”
Despite the fact that most FinTech users have probably interacted with their API, far fewer would likely know Plaid by name. Yet the company has been growing tremendously over the years as its helped bridge the gap between banks and startups. CNBC notes that some even say the company has “helped accelerate the growth of the payment sector over the past five years.”
Speaking to CNBC, Plaid’s co-founder William Hockey admitted, “We’ve known about Quovo for a long time and had been admiring them from afar,” adding, “As we started to look at the market going forward, a big goal was to empower a full financial picture for the user — this builds towards that vision.” Indeed the promise of what these two companies can achieve together could also empower fellow FinTechs, making it easier for them to get the data they need to make their applications and ideas work. With that it seems like Plaid’s first big acquisition was a wise and important one.