Unpacking the $5.3B acquisition of Plaid

Karthik Suresh
5 min readJan 22, 2020

Last summer, while working at Blend, a digital lending platform focused on helping lenders process loans in a much simpler, faster, and safer way, I had the opportunity to explore and use some of Plaid’s API’s to connect with consumer data in order to process loan information in a much faster way. Since then I have been intrigued by Plaid’s business model and its ecosystem. Following on the heels of its recent acquisition by Visa, I’ve decided to unpack what Plaid does and why it’s a valuable component not just to Visa, but to the overall fintech ecosystem.

Photo by Jordan McDonald on Unsplash

Imagine you’re a fintech startup like Venmo, Wealthfront, or Coinbase where a core part of your model needs users to connect with their bank or credit union in order to gain access to their account info, bank transactions, and credit information. Unfortunately with over 10,000 financial institutions in the US alone, many fintech startups simply don’t have the bandwidth to write institution specific API’s for all the potential banks users might connect to. They need to focus on executing their core mission and not worry about connecting consumers with their respective financial institutions.

Here comes Plaid
Plaid solves this by allowing fintech companies the ability to connect to financial institutions through a developer-friendly API, thereby allowing these startups to focus on their true…

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Karthik Suresh

Venture Partner @ContraryCapital, Eng @Blend. Previously Growth @Coursera