As Plaid expanded its fintech services, it also grew its customer base.
Plaid started as a company that connected consumers’ bank accounts to financial applications, but has since gradually expanded its services to include lending, identity verification, credit reporting, fraud prevention, payments and more.
The 11-year-old company was on the verge of being acquired by Visa for $5 billion before the deal was blocked by antitrust regulators. Plaid raised capital at a $13.4 billion valuation after the deal fell through and has since been working to diversify its revenue streams.
When it first started, the fintech giant primarily sold to other fintech companies. Then more banks and financial institutions jumped on board. Today, its customer base also includes larger companies looking to incorporate the solution into their own services, including a combination of established fintechs and incumbents, such as Venmo, SoFi, Chime, Rocket Money, H&R Block, Western Union, Affirm, Citi, and Shopify.
So it was no surprise when Plaid appointed Jennifer (Jen) Taylor as its first president earlier this year. Taylor has years of experience in large companies, most recently serving as Chief Product Officer at Cloudflare. Prior to Cloudflare, she held senior executive roles at Salesforce, Facebook (now Meta) and Adobe, and spent two years as a venture capitalist.
“I’ve had the privilege of working at very large companies that may not have necessarily been that large when I joined, and being involved in, for example, moving from a single product to multiple products, from a single market segment to multiple market segments,” she said in an interview with TechCrunch.
PLAID’s growth beyond fintech
With its expansion into a multi-product company, Plaid is starting to see real traction outside of its traditional fintech clients. In fact, the company says that growth from enterprises and traditional financial institutions is starting to outpace its other businesses.
Plaid has added hundreds of new enterprise customers over the past year, expanding its enterprise customer base to more than 1,000 companies, Taylor told TechCrunch exclusively, bringing the company’s total customer count to 8,000.
“Our broad suite of products across onboarding, payments, lending and fraud protection has enabled us to do business with large companies like RealPage, H&R Block and Western Union that would have been unthinkable just a few years ago,” Taylor said, adding that Plaid’s goal is to evolve into a “one-stop shop” for its customers by offering an integrated suite of products that address a wide range of their business needs.
Meanwhile, the company said its identity, payments and credit product lines are growing “five times faster” than its core account connection product. In fact, Plaid’s identity products are now its fastest growing product line, with over 50% of its customers being non-fintech companies.
“As our new products gain popularity, it allows Plaid to expand into new markets where we didn’t exist before,” Kevin Young, Plaid’s head of product communications, said in an interview. “And as these new products grow, it takes us into new market segments.”
The startup has also landed clients in real estate tech, property management, e-commerce and auto lending, including current clients Zillow, Faire, Carvana and CarMax.
Overall, the company says it has 500 million accounts connected to 12,000 banks and financial institutions.
Why Plaid launched Layer, its onboarding overhaul
On June 18, the company announced its latest product, Layer, a new product designed to consolidate “all the critical onboarding steps” for users, from verifying their identity to linking their bank account, into a “secure, instant experience.”
Alan Meyer, head of identity at Plaid, says Layer can cut the time it takes to sign up for an app or service by 90%. In most cases, people who have their details saved through Plaid when signing up for other accounts can simply enter their phone number and complete onboarding, like applying for a loan or depositing money into their account, “within a few clicks.” Past clients include Possible Finance and Empower.
Meyer likened the Layer experience to shopping on Amazon.
“When we buy something in general, our default is to use Amazon. Why do we do that? Because we know our information is safe. They already know how we pay, they check out really fast, and we know what to expect,” he says. “So we said to ourselves, ‘Wouldn’t it be great if we could have the option to have that same experience, that same consumer user experience?'”
Improving ease of onboarding could lead to higher conversion rates for Plaid’s customers, Meier added.
For Taylor, it’s also all about protecting financial information in a future world where AI will take on more tasks: “The real impact will be the differentiation that AI brings to our network and the products we build on top of it, like underwriting and payments.”
Plaid has been public about its plans to go public, though no timeline has been set yet, but the hiring of Taylor and the CFO hints at such plans.
The company’s enterprise expansion strategy is a familiar one, in that other big fintechs are also moving in this direction: Payments giant Stripe (a Plaid partner and competitor) has long been enterprise-focused, and expense management startup Brex has said it will continue to serve startups while also looking to grow its enterprise customer base.
The big question is how that approach will be received by investors when the company eventually goes public.
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