Plaid co-founders William Hockey and Zach Perret.
Fintech start-up Plaid is revving up its global expansion, which should enable the popular apps it powers to do the same.
After launching in Canada last year, the venture-capital-backed company announced its U.K. launch on Wednesday. Plaid’s CEO and co-founder Zach Perret said their presence abroad will make it easier for consumers to connect to U.K.-based fintech apps and for American financial start-ups to expand abroad, too.
“We’re not just talking about launching in the U.K. here, we’re talking about launching a full international strategy,” Perret told CNBC in a phone interview. “Our hope is that it becomes easier for fintech firms to go international.”
Plaid, recently valued at $2.7 billion, already connects U.S. bank accounts to apps like Venmo, Robinhood, Coinbase and Acorns. The firm will bring the same capabilities — including account funding and fast authentication — to British start-ups. The U.K. was an obvious next step, Perret said, thanks to an existing and “incredibly vibrant fintech ecosystem.”
So-called challenger banks have thrived in the U.K. under tech-friendly regulation.The Competition and Markets Authority, or CMA, made it easier for these start-ups to enter the retail banking market after 2008, allowing new banks like Revolut to exceed a billion-dollar valuation. European fintech start-ups Monzo, Revolut, and N26 have all earned “unicorns” status with valuations topping the $1 billion threshold. All three announced plans to establish U.S. operations this year. Perret said the goal is to provide fintechs with similar “global ambitions” a “fully inclusive platform that covers the U.S. and Canada.”
“There’s also a lot of growth in China — the eventual plan to expand further internationally,” Perret said.
In order to link bank accounts with Venmo and others, these fintech applications rely on a protocol known as application programming interface, or APIs. Plaid’s APIs have attracted investments from the venture arms of Goldman Sachs, Citigroup and American Express, and some say, has helped accelerate the growth of the entire payment sector over the past five years. Other notable backers include Andreessen Horowitz, Index Ventures, NEA, the venture arm of Google, and Kleiner Perkins.
Last year, one quarter of all Americans with bank accounts used Plaid to connect to a fintech app, up from 13% in 2017, the company said. In January, the start-up raised $250 million at a $2.7 billion valuation and added former Kleiner Perkins partner and infamous tech investor Mary Meeker to its board.