Plaid's Growth Beyond Fintech

Plaid, a company that initially focused on connecting consumer bank accounts to financial applications, is expanding its reach beyond traditional fintech customers into the enterprise market. The company has been diversifying its revenue streams and has seen its enterprise and traditional financial institution growth outpace the rest of its business.

• Plaid has grown its enterprise customer base to over 1,000, adding hundreds of new enterprise customers over the last year.
• Its total customer count is 8,000, including a mix of established fintechs and incumbents, such as Venmo, SoFi, Chime, Rocket Money, H&R Block, Western Union, Affirm, Citi, and Shopify.

Enterprise Growth Drivers

Plaid's broader product suite, encompassing onboarding, payments, lending, and anti-fraud, has opened doors with enterprise companies like RealPage, H&R Block, and Western Union. These enterprises were not part of Plaid's customer base a few years ago. The goal is for Plaid to evolve into a one-stop shop for its customers by offering a suite of integrated products that address their wider business needs.

• Product lines such as identity, payments, and credit are growing five times faster than its core account connectivity products.
• Plaid's identity product is currently its fastest-growing product line, with more than 50% of its customers being non-fintech clients.

Expanding Into New Markets

Plaid's growth into new product lines has propelled it into new market segments. The startup has been gaining customers in the proptech, property management, e-commerce, and auto lending spaces. For example, it now counts Zillow, Faire, Carvana, and CarMax as customers.

• The company says that it connects to 12,000 banks and financial institutions with 500 million connected accounts.

Layer: Plaid's Onboarding Revamp

On June 18, Plaid revealed its latest offering, Layer, a new product designed to unify all the critical onboarding steps for users—from identity verification to bank account linking—into one secure, instant experience.

• Layer can reduce the time it takes for someone to sign up for an app or service by 90%.
• Customers so far include Possible Finance and Empower.

Layer: Enhancing User Experience

Plaid's Head of Identity, Alain Meier, likens the Layer experience to shopping with Amazon, where users have a secure, fast, and familiar checkout experience. Layer aims to provide the same level of user experience for financial services.

• Layer is expected to lead to higher conversion rates for Plaid's customers by simplifying the onboarding process.

Plaid's Enterprise Focus: A Key Strategy

Plaid's strategy of a push into enterprise is a familiar one. Payments giant Stripe, both a partner and competitor to Plaid, has long had a focus on enterprise. Expense management startup Brex, while it still serves startups, has also announced it was looking to bolster its enterprise customer base.

• Plaid's enterprise focus is a strategic move to capture a broader market and address the growing demand for integrated financial solutions within organizations.

Plaid's Future: Going Public

Plaid has been vocal about its plans to go public, although it hasn't yet set a timeline. The hiring of a CFO, alongside the company's success in the enterprise market, points to those plans.

• Plaid's success in expanding into the enterprise market and its strong growth in payments and identity products could further enhance its attractiveness to investors.