Fintech firm Plaid Inc announced on Tuesday that it will buy Quovo inc in a deal valued just shy of USD 200 Million.
Plaid is a fintech start-up that makes software platforms for consumers of fintech companies to connect with their banks and transact through application program interface (API). The Company now plans to buy a similar start-up called Quovo to boost its portfolio of software products that connect banks with fintech apps.
The San Francisco-based company uses technology that links bank accounts to popular fintech apps like Venmo, Robinhood, Coinbase, and Acorns. About 25% of people in the U.S who have banks connected to Plaid through an app, as of December. More recently Plaid has raised USD 250 Million at a USD 2.7 Billion valuation and added Kleiner Perkins partner Mary Meeker to its board.
Investors backing Plaid include heavy hitters such as Goldman Sachs Group Inc, American Express Co, and Citigroup Inc.
Similar to Plaid, Quovo also links customers' financial accounts with consumer-facing apps. However this New York-based start-up shifts its focus on more investment and brokerage data. Some of Quovos customers are fintech companies including Betterment, Wealthfront, and SoFi to incumbents like Stifel, Vanguard, Empower Retirement, and John Hancock.
Plaid has acquired Quovo to make it easier for developers to build products that incorporate investment and brokerage data. Collaboratively the companies will now exist on a single platform that developers and large companies can use to build any financial application. By adding Quovo to Plaids portfolio it set the Company towards there vision of a fully enabled digitally-delivered financial system. Plaid CEO Zach Perret told CNBC "It creates a more holistic financial picture," Perret told CNBC. "That's crucial when you think about the future of finance becoming more digital."
“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. 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”Plaid said in a blog.