By Tanaya Macheel
Plaid, the company that connects consumer bank accounts to fintech apps like Venmo, Coinbase or Robinhood, is acquiring competitor Quovo, according to a Tuesday morning blog post by the Plaid founders.
Data aggregators have existed in financial services for decades, but Plaid and Quovo ー the newest kids on the block ー have been especially popular among digitally native and more consumer-centric companies. They’re both data aggregators and providers of application programming interfaces, or APIs ー the connective tissue of financial services that allow banks and fintech companies to connect and share data more easily and securely. Big players that came before them, like Yodlee, have been known to sell user data to hedge funds; Plaid and Quovo have said they do not.
The agreement stands to give Plaid a stronger foothold in the investment and brokerage sector, founders Zach Perret and William Hockey said in their post.
"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," they said. "Quovo has built the leading platform for investment and brokerage aggregation."
Plaid, which launched in 2013, has been successful in partnerships with companies looking to integrate with bank data, such as checking and credit card account information. Its best known customers include Venmo, Coinbase, and Robinhood, as well as legacy financial institutions like Chase, Citi, and Amex. Plaid supports more than 9,600 U.S. financial institutions.
Quovo, which counts Betterment, Wealthfront, and SoFi as well as legacy firms Stifel, Vanguard, and John Hancock as customers, has been the platform of choice for companies that want to access and integrate consumers' brokerage data.
Plaid raised $250 million in December at a $2.7 billion valuation, bringing its total funding to date to $310 million. At the time the company said it would use the financing to expand its presence in New York, Salt Lake City, as well as its home base of San Francisco.