Visa to Acquire Plaid in $5.3 Billion Deal

Updated 1/14/2020: The first big fintech acquisition of the year just crossed the headlines: Visa has agreed to acquire innovative fintech Plaid for a reported $5.3 billion in “total purchase consideration.”

“Today marks an important milestone for our company and for fintech,” company co-founder and CEO Zach Perret wrote on the Plaid blog earlier today. “What started with two founders building in a cramped conference room has become an incredible network that enables millions of consumers to interact with over 2,500 digital finance products.”

Plaid’s technology connects digital consumers with thousands of apps and services ranging from Transferwise and Betterment to Chime, Acorns, and popular payment app, Venmo. The company estimates that one in four individuals with a U.S. bank account have used Plaid to connect with thousands of developers across 11,000+ financial institutions.

Visa said the acquisition will bolster the company’s capacity to serve and reputation with fintech developers – especially when it comes to providing them with enhanced payment functionality and related value-added services. Visa also believes the acquisition will help open new business opportunities both in the U.S. and around the world.

“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” Visa CEO and chairman Al Kelly said. “Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions, and consumers.”

Visa participated in Plaid’s Series C round in 2018, which was led by Index Ventures and Kleiner Perkins. The company raised $250 million in that funding raising effort. Plaid began the year with an acquisition of its own, purchasing account aggregation and data analytics technology provider Quovo in January of 2019. The value of that deal was not disclosed; Bloomberg reported that the sticker price for Quovo could have been as high as $200 million. Quovo, incidentally, is also a FinDEVr alum, participating in our New York developers conference in 2017.

Plaid demonstrated its technology at FinDEVrSiliconValley in 2014, demonstrating how its API for Financial Infrastructure enabled developers to leverage data quickly, efficiently, and securely power fintech applications. Headquartered in San Francisco, California and founded in 2012, Plaid had raised $310 million in funding previous to today’s announcement.

The ripples from the acquisition news are reverberating throughout the fintech community. And while some are worried about the ability of the innovative startup from San Francisco continue to drive change in the industry, others are busy heralding the news as a victory for fintech and incumbent financial services firms, alike.

Indeed, the acquisition of Plaid by Visa has put other fintechs involved in financial data on notice that they too may hear an inquiring knock on their proverbial doors. One observer on Twitter asked “Will $MA pick up Finicity now?” As of this writing, neither company has deigned to comment.

Betterment Now Wants Your Liquid Cash, Too

Betterment knows its clients are smart when it comes to saving for their futures. And with that well-established, financially savvy client base, the company launched a checking and savings platform this week.

The new platform is called Betterment Everyday (because what’s better than a user base that logs in every day?) and is aimed to help the company’s clients better manage their money today so that they can maximize earnings for the future.

Betterment Everyday offers savings and checking accounts, with customer deposits held at partner banks including Citi, Barclays, and Valley National. The savings accounts, available today, can earn up to 2.69% APY until the end of this year, after which will drop to 2.43% and be subject to change.

The checking product will be available later this year and comes with benefits typical of online-only banks. Users will receive a debit card issued by nbkc bank of Overland Park, Kansas, will be reimbursed for all ATM fees worldwide, will not be charged monthly maintenance fees, and do not need to maintain a minimum balance.

“As we launch Betterment Everyday, we’re starting to bring our role as your financial advisor into your everyday life, turning your daily choices and transactions into saving for the future,” said Betterment CEO Jon Stein in a blog post. “We’re building the framework for where we believe the industry can (and should) move. We believe the future is smart money management, and we’re leading the way.”

In addition to attracting new clients and refocusing existing users, the new account offerings also serve to compete with fintechs that have launched similar products in recent months. Wealthfront, SoFi, which offer high interest savings accounts boasting yields of 2.57% and 2.25%, respectively, and Acorns, which offers a debit card for a fee of $3 per month.

Last year Robinhood launched a checking account that boasted a 3% interest rate, but quietly rescinded the product after regulators from the SEC and SIPC cited lack of regulatory oversight. The startup had not consulted regulators before the proposed launch and is now working on a new version of the checking account. Today, Betterment may be in a similar situation. The company did consult regulators before this week’s launch, but, according to CNBC, has been asked to provide more information on the new offering.

Betterment CEO Jon Stein debuted the company’s MultipleGoals feature at FinovateFall 2011. Since it was founded in 2008, the company has raised a total of $275 million. Last fall, Betterment unveiled a Trust Account Opening feature that allows advisors to manage the entire process. And this year, the company was honored on the Forbes Fintech 50 list for the 4th year in a row.

Finovate Alumni News

On Finovate.com

  • Betterment Now Wants Your Liquid Cash, Too.
  • Finovate Alums Honored at PayTech Awards 2019.
  • BlueRush Inks IndiVideo Deal with Nikia Dx.

Around the web

  • DriveWealth announces collaboration with U.S.-based registered investment advisor Vested Finance to give investors in India access to U.S. stock.
  • Mastercard forges new partnership with SumUp, boosting the number of electronic payment acceptance locations across 27 countries in Europe.
  • Singapore-based Cheers Paytech chooses core banking technology from Mambu.
  • New Zealand’s seventh largest bank, TSB, goes live with Temenos Infinity for online account opening and onboarding.
  • ThetaRay launches version 4 of its analytics platform to help banks detect and prevent cybercrime.
  • BeSmartee announces direct integration with real estate document collaboration and recording technology solution provider Simplifile.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Content Capture Innovator Ephesoft Allies with Grant Thornton.
  • Gusto Raises $200 Million with $3.8 Billion Valuation.

Around the web

  • TD Ameritrade offers voice-activated investing technology.
  • NIIT Technologies’ revenue grew 16+% YoY, and its after-tax profit increased 2% YoY.
  • Scalable Capital partners with Futurae to add multi-factor authentication technology into its investment platform.
  • LoanScorecard goes live with its Bank Statement Analyzer tool.
  • Betterment adds savings and checking accounts to its offerings.
  • U.K. neobank revverbank to deploy cloud banking technology from Finastra.
  • CardFlight partners with PAX Technology to make SwipeSimple terminal available to clients on the PAX A920 and PAX A80.
  • Australia’s Volt Bank teams up with FIS to power its mobile and card payment services.
  • Alterna Bank unveils its new advanced digital platform, Forge, powered by Backbase.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Revolut and TrueLayer Team Up to Ease Access to Open Banking Data.
  • Flybits Secures $35 Million in Series C Led by Point72 Ventures.
  • Launchfire’s Lemonade Takes Off as Standalone SaaS Brand.

Around the web

  • Avaloq integrates OneSpan’s anti-fraud technology into its SaaS banking platform.
  • PayPal’s international money transfer acquisition, Xoom, goes live across Europe.
  • SumUp secures €330 million debt financing.
  • Ritholtz Wealth turns to Betterment’s Betterment for Advisors, a white label online investing solution, to power its Liftoff automated investment platform.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alums Shine in 2019 Forbes Fintech 50 Roster

A baker’s dozen of Finovate alums has been honored this week with spots on the 2019 Forbes Fintech 50, an annual aggregation of what the editors called “the most innovative companies in fintech.”

Here are the Finovate alums that made the cut. Read the full list.

“Recognition as a leading innovator in fintech is tremendous validation for the hard work we’ve done at Marqeta to open the industry up to the possibilities and opportunities of modern card issuing,” company CEO and founder Jason Gardner said. Marqeta is among the 20 companies to make its first appearance on the Forbes Fintech 50 roster.

Also earning their first appearances on Forbes Fintech 50 roster are New York based mobile investment platform Stash and San Francisco supply chain payments innovator Tradeshift.

“Very excited to be included in the 2019 Forbes Fintech 50!,” Stash tweeted once the news was released at the start of the week, “Monday = made.”

“We made the list!” Tradeshift tweeted this morning.

Summarizing this year’s selection of top fintechs, the editors noted that while 19 out of the 50 fintechs featured are unicorns with valuations of more than $1 billion, a nearly equal amount – 20 startups – are making their first showing on Forbes top fintech list. The two areas where newcomers were more prevalent, according to the editors, were payments technology and startups serving the un- and underbanked.

Finovate Alumni News

On Finovate.com

  • Credit Karma Acquires Noddle to Launch in the U.K.

Around the web

  • Moneyhub announces integration with PensionBee API.
  • Outsystems unveils new program, outsystems.ai, to leverage AI and machine learning to improve software development.
  • Finastra introduces Open Banking Readiness Index for Asia Pacific region.
  • Trulioo reports ability to verify five billion people via its identity verification platform, Global Gateway.
  • Wipro collaborates with Check Point Software to offer cloud security services.
  • Unison expands with Goldwater Bank Partnership.
  • Flywire partners with the Dallas-Fort Worth Hospital Council to offer members payment solutions.
  • How I Built This podcast features Betterment founder Jon Stein.
  • Roostify names Courtney Keating Chakarun as new Chief Marketing Officer.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Fighting for Customers: Will Tech Giants or Big Banks Win the Data War?
  • PayPal’s Walmart Partnership Makes a Move for the UnderBanked

Around the web

  • UK payments startup SumUp launches a 3G-powered credit card reader.
  • Worldpay extends real-time payouts to 50+ countries.
  • TD Bank Group and Flybits expand Canadian banking technology relationship to provide TD customers enhanced, personalized mobile experiences.
  • BlueRush lands co-selling agreement with Valeyo’s network of more than 95 Canadian financial institutions.
  • Tradeshift teams with credit insurer Coface to ensure greater financial transparency between buyers and suppliers.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Finovate Alumni News

On Finovate.com

  • Gro Solutions Helps Vermont FCU Deliver Better Banking Experiences.
  • Bringing Legacy Banks into the 21st Century.

Around the web

  • Forbes features SMRTSVR from Vaultz and Best of Show winner Golden in its look at PFM apps for people over 50.
  • Blockchain technology pioneer, Dr. Stuart Haber, joins Endor’s scientific advisory board.
  • Bpm’online adds enhancements to accelerate sales, marketing, operations, service, and citizen development in its latest update.
  • IDC Financial Insights includes CREALOGIX in its top 100 fintech ranking.
  • Dorsum launches its MyWealth wealth management app at Dubai banking conference.
  • Betterment introduces new Trust Account Opening feature for its Betterment for Advisors platform.
  • Onfido announces partnership with international remittance platform, Remitly.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

 

Forbes Names 17 Finovate Alums on the Forbes Fintech 50

Forbes has released the third* Fintech 50 list, which this year features 17 Finovate alums, many of which have made the list for the third time. The Fintech 50 list highlights the top private fintechs that have operations, customers or impact in the U.S. The list excludes public companies and divisions of public companies.

Here are the alums honored in this year’s compilation:

Ayasdi

Among 22 newcomers to this year’s list.

Betterment

The company’s third time making the list.

Blend

Among 22 newcomers to this year’s list.

Blockchain

Among 22 newcomers to this year’s list.

Chain

The company’s third time making the list.

Coinbase

The company’s second time making the list.

Credit Karma

The company’s third time making the list.

Feedzai

Among 22 newcomers to this year’s list.

Gusto (formerly ZenPayroll)

The company’s second time making the list.

Kabbage

The company’s second time making the list.

Kensho

The company’s third time making the list.

Plaid

The company’s third time making the list.

Qapital

The company’s second time making the list.

Ripple

The company’s third time making the list.

Symbiont

Among 22 newcomers to this year’s list.

Symphony

The company’s second time making the list.

TransferWise

The company’s third time making the list.

In 2016, the list contained 20 Finovate alums, including Betterment, Chain, Coinbase, Credit Karma, Gusto, Kabbage, Kensho, Klarna, Motif, Personal Capital, Plaid, Qapital, Quantopian, Ripple, Signifyd, SoFi, Symphony, TransferWise, TrueAccord, and Xignite.

The list from three years back also contained 20 Finovate alums. Algomi, Betterment, Braintree, Chain, Credit Karma, HelloWallet, Kensho, LearnVest, Motif, Personal Capital, Plaid, Prosper, Quantopian, Ripple, Simple, TransferWise, TrueAccord, Vouch, Wealthfront, and Xignite made the list.


*Forbes skipped this compilation for 2017.

Finovate Alumni News

On Finovate.com

  • AutoGravity Tops $2 Billion in Financing Requested Milestone.
  • Geezeo Powers PFM Platform for F&M Bank of Virginia.
  • Signicat Raises $2 Million to Build Out its Identity Assurance as a Service Technology.

Around the web

  • Forbes: Atlanta Startup Pindrop Makes Its Push To Power Security For The Voice Economy.
  • Chevy Chase Trust selects FIS for Unified Wealth Management Technology Platform and Services.
  • eMoney Advisor and Capital One announce new API data sharing agreement.
  • Check Point Technologies announces Infinity Total Protection, a new security model to prevent ‘Gen V’ threats and attacks
  • Investment News: Betterment beefs up 401(k) advisory board with ex-Vanguard expert.
  • BMO Financial Group chooses Up Real -Time Payments solution from ACI Worldwide.
  • Global payment providers IDT and Mercury FX to use Ripple’s XRP.
  • The Paypers interviews Roberto Valerio, CEO of Risk Ident, on getting the best from fraud prevention solutions.
  • First Data expands agreement with SBI Card.

This post will be updated throughout the day as news and developments emerge. You can also follow all the alumni news headlines on the Finovate Twitter account.

Betterment Celebrates the Season of Giving with New Share Donation Feature

Robo advisory platform Betterment made an announcement today that it is not only making it easier to give to charities, it is also giving consumers more reasons to do so.

Starting November 28, on Giving Tuesday, Betterment investors will be able to donate shares of long-term investments from their taxable accounts directly to charitable organizations. While the act of giving may grant users a warm heart, Betterment has made a point to emphasize the self-serving part of the equation– tax benefits. Investors who donate can eliminate capital gains tax on the contributed shares and can also deduct the value of the gift on their tax return. To make the process as easy as giving cash, the company does four main things:

  • Tracks how much of your account is eligible to give to charity (i.e., it sorts for stocks that you’ve held for more than one year)
  • Estimates the tax benefits before you complete your gift
  • Moves assets of up to $1 million from your account to a charitable organization’s account without any paperwork
  • Emails a tax receipt after the donation is complete

At launch, investors can give to eleven charities, including UNICEF USA, Wounded Warriors Family Support, Hour Children, Against Malaria Foundation, DonorsChoose.org, GiveWell, Save The Children, Feeding America, Big Brothers Big Sisters of NYC, World Wildlife Fund, and Breast Cancer Research Foundation. Betterment is soliciting user requests for new charities to be added.

Founded in 2008, Betterment CEO Jon Stein debuted the company’s Multiple Goals feature at FinovateFall 2011. This summer, the New York-based company received a $70 million investment from Sweden’s Kinnevik, bringing Betterment’s total capital to $275 million and boosting it up to a valuation of $800 million.