As Plaid has expanded its fintech services, while expanding its customer base.
Plaid got its start as a company that connected consumers’ bank accounts to financial apps, but has since gradually expanded its offerings to also include loans, identity verification, credit reporting, anti-fraud and payments.
The 11-year-old company was nearly bought by Visa for $5 billion before antitrust regulators pulled the plug on that deal. Plaid then raised funds from a valuation of $13.4 billion After the deal failed and has since strived to diversify its sources of income.
In its early days, the fintech giant primarily sold to other fintechs. Then more banks and financial institutions entered the mix. Today, its customer base also includes large, general enterprises looking to integrate solutions into their offerings, including a mix of established fintechs and incumbents, such as Venmo, SoFi, Chime, Rocket Money, H&R Block, Western Union, Affirm, Citi and Shopify. .
So it’s fitting that earlier this year, Plaid named Jennifer (Jen) Taylor as its first president. Taylor has years of experience at large companies, most recently serving as Chief Product Officer at Cloudflare. Prior to Cloudflare, Taylor held senior leadership roles at Salesforce, Facebook (now Meta), and Adobe and worked for two years as a venture capitalist.
“I’ve had the privilege of working at some very large companies that maybe weren’t necessarily that big when I joined them and been able to be part of the efforts, for example, to go from a single product to a multiple product and a single market. segment to multi-market segment,” she told TechCrunch in an interview.
Plaid’s growth beyond fintech
This expansion to become a multi-product company has allowed Plaid to start seeing real traction beyond traditional fintech customers. In fact, the company says growth in traditional businesses and financial institutions is starting to outpace the rest of its businesses.
Plaid grew its enterprise customer base to more than 1,000, after adding hundreds of new enterprise customers over the last year, Taylor told TechCrunch exclusively. The company’s total number of customers stands at 8,000.
“Our broader product suite, encompassing onboarding, payments, lending and fraud prevention, has opened doors to companies like RealPage, H&R Block and Western Union that weren’t on the table years ago. is a few years old,” Taylor said. The aim, she added, is for Plaid to evolve into “a one-stop shop” for its customers by offering a suite of integrated products that meet their broader business needs.
Meanwhile, product lines such as identify, payments and credit are growing “five times faster” than its primary account connectivity products, according to the company. In fact, Plaid’s identity product is currently its fastest growing product line, with over 50% of its customers not being fintech customers.
“As our new products have gained traction, it has helped Plaid expand into new markets where it was not previously present,” Kevin Young, Plaid’s product communications manager, said in an interview. “And as these new products develop, it pushes us into new market segments.”
The startup has also gained customers in proptech, property management, e-commerce and auto lending. For example, Zillow, Faire, Carvana and CarMax are now among its clients.
In total, the company claims to connect to 12,000 banks and financial institutions with 500 million connected accounts.
Why Plaid launched Layer, its integration overhaul
On June 18, he revealed his latest offer, Layera new product designed to unify “all critical onboarding steps” for users – from identity verification to bank account linking – “into one secure, instant experience.”
Alain Meier, head of identity at Plaid, says Layer can reduce the time it takes for a person to sign up for an app or service by 90%. In most cases, people who have already stored their details through Plaid when creating other accounts only need to enter their phone number and can do things like full onboarding to apply for a loan or fund their accounts “in just a few clicks”. Our clients so far include Possible Finance and Empower.
Meier compared the Layer experience to shopping on Amazon.
“When we go to buy things, we usually default to Amazon. Why are we doing this? Because we know our information will be secure. They already have our payment method. The checks are going to be extremely quick and we know what to expect,” he said. “So we said, ‘Wouldn’t it be great if we could have that same type of experience and that same type of consumer choice when it comes to user experience?’ »
This increased ease of integration has the potential to lead to higher conversion rates for Plaid customers, Meier added.
For Taylor, this is also part of securing financial information in the coming world where AI will perform more tasks. “The real impact is in the differentiation this creates for our network and the products we build on it, including underwriting and payments. »
Plaid has expressed its intention to make it public, although it has not yet set a timetable. But the hiring of Taylor as well as that of a financial director attest to these plans.
The company’s strategy of going entrepreneurial is familiar, as other major fintechs have also followed this direction. Payments giant Stripe (both Plaid’s partner and competitor) has long focused on the business. Expense management startup Brex, while still serving startups, also announced that it is looking to strengthen its enterprise customer base.
The big question is how its approach will resonate with investors when it finally goes public.
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