By
Godfrey Benjamin
April 23rd, 2024
San Francisco-based fintech app provider Plaid has announced its first major acquisition. The startup allegedly spends $200M to acquire its rival company Quovo.
The year has started with big deals for some companies. This time fintech startup Plaid is acquiring its competitor, Quovo, and is going to launch a new enhanced full-service API platform.
First Acquisition
The startup called Plaid is known as a company that deals with building APIs for financial consumer-oriented services apps, in other words, this fintech firm gives developers an opportunity to create their financial services applications.
As it has been recently announced, Plaid has decided that it is ready to make its first major acquisition. It is acquiring Quovo, which is a company doing just similar business but focusing on the investment aspect of the financial sphere, and, consequently, is the Plaid’s rival.
Most notably, Quovo’s activities include linking customers’ financial accounts with financial apps. Nevertheless, from the very beginning of its operating this New York-based firm has been paying more attention to investment and brokerage data. Its client base includes numerous firms like Betterment, Wealthfront, Vanguard, and Empower Retirement.
Meanwhile, the details of the deal haven’t been officially disclosed. According to the source that preferred to stay unnamed, Plaid will pay $200 million but this information is not confirmed.
Acquiring its rival, the San Francisco-based startup is planning to expand the sphere of its activities and enter the wealth management market. This new move will enable developers to add a consumer’s full financial picture to their future financial apps.
Plaid is building links between bank accounts and various fintech apps including Robinhood, Venmo, and Coinbase. According to the data provided in December, Plaid’s technology is used by 25 percent of American citizens and residents who have their own bank accounts.
Just for a reminder, not so long ago Plaid managed to raise $250 million in the latest Series C funding round that was led by popular venture capitalist Mary Meeker, accompanied by such prominent players as Norwest Venture Partners, Andreessen Horowitz, Index Venture, and Coatue Management. As we have already reported, after this round Plaid managed to hit a $2.65 billion valuation.
New Opportunities for Plaid
Following the deal, both companies will share a single platform. This platform will be intended for large companies and developers that will use it to create a wide range of financial applications.
Speaking about the acquisition, William Hockey, co-founder of Plaid and its Chief Technology Officer, stated:
“We’ve known about Quovo for a long time and had been admiring them from afar. 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.”
Thanks to this acquisition, Plaid will have a more holistic view of all the financial spheres and, as a result, it will offer much more opportunities for its clients.
It is planned that the deal will be closed this week and the team of Quovo will join Plaid in the near future.