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Plaid

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Updated
  • Type: Financial-data network that connects bank accounts to apps and verifies account details for fintechs and lenders.
  • Legal entity: Plaid Inc., San Francisco.
  • Founded: 2013, by Zach Perret and William Hockey, who met as consultants at Bain & Company.
  • Pandemic role: bank-account connection vendor inside online PPP application platforms, including Blueacorn's and Womply's. It was not a PPP lender and did not decide eligibility.

Identity and role

Plaid's software connects an app or lender to a customer's bank account through the customer's banking login, so the app can confirm the account and pull data such as transactions or payroll records. In the PPP that made it plumbing: platforms used it to confirm an applicant's bank-account details so that lenders sent loan proceeds to the right account.

Background

Visa agreed to buy Plaid for $5.3 billion. On November 5, 2020 the Justice Department sued to block the deal, calling Visa "a monopolist in online debit services" and Plaid a firm "developing a payments platform" that could challenge it. The companies abandoned the deal in January 2021.

Pandemic role

On April 6, 2020, days after the CARES Act passed, CNBC reported that Plaid was building a product to let small businesses share payroll data with their banks for emergency loans, cutting "the payroll portion of applications down to a matter of minutes." Chief executive Zach Perret told CNBC: "Speeding up loan processing could mean the difference between a business and its employees surviving intact, or going bankrupt and adding to the skyrocketing unemployment."

The House Select Subcommittee's December 1, 2022 report on fintechs in the PPP names Plaid once. Documents it obtained show that Blueacorn "largely relied on off-the-shelf fraud and KYC technology software subscriptions," and that, according to Blueacorn, it used "four commonly used third party software products (Plaid, Giact, Onfido, and IDology)" to "help improve our risk posture and mitigate fraud." The check the report says Blueacorn sidelined in April 2021, to flag fewer applications, was IDology's multiple-choice identity questions, which Onfido replaced as the primary identity check.

The June 2024 arbitration award in Womply's fee dispute with the PPP lender Benworth Capital Partners describes Womply's platform as having "connected to bank accounts using Plaid," and says that at funding "Plaid would again confirm the applicant's bank account information so that the lender could be certain it was sending funds to the proper account."

Own relief

No PPP loan to Plaid Inc. appears in the SBA's PPP loan-level data, which runs through September 30, 2024, and no lender in that file carries Plaid's name.

On July 20, 2022 Judge Donna M. Ryu of the Northern District of California granted final approval to a $58 million class settlement in the privacy case brought by James Cottle and others, which alleged that Plaid used consumers' banking login credentials to collect and sell detailed financial data without their consent. In November 2024 a Los Angeles accounting firm sued the lender Lendistry over its handling of applicant data in a California state grant program; American Banker reported that many of the alleged privacy violations involved Lendistry's technology partners, Plaid and Qualified, but that neither was named as a defendant. The House report makes no finding about Plaid itself.

Where it is now (2025–2026)

Plaid raised $425 million in a Series D led by Altimeter Capital in April 2021, at a valuation of about $13.4 billion. On April 3, 2025 Perret announced a raise of about $575 million led by Franklin Templeton, with Fidelity Management and Research and existing investors NEA and Ribbit Capital, to cover employee tax withholding on expiring restricted stock units. TechCrunch reported the round at a $6.1 billion valuation and said the company would not go public in 2025.

On September 15, 2026 Plaid and ID.me announced a partnership for government benefit payments: ID.me verifies the claimant, and Plaid confirms through the claimant's own bank that the receiving account belongs to that person before the money moves (announcement). The announcement describes a service on offer and names no state or federal agency that has adopted it. Plaid's Eric Sager said it would mean "eligible people get paid in minutes."

Sources

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