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Fintech APIs Consolidate As Plaid Buys Quovo In $200M Deal

Fintech APIs Consolidate As Plaid Buys Quovo In $200M Deal

Fintech startup Plaid is negotiating a $200 million acquisition of rival Quovo, according to a Tuesday announcement. The merger would unite similar application programming interfaces connecting bank accounts to other fintech apps, such as Venmo, Coinbase and Robinhood.

"Together, we'll build a single platform that developers and large companies alike can use to build any financial application — from payments to lending to wealth management," Plaid Co-Founders Zach Perret and William Hockey said on CNBC.

San Francisco-based Plaid is a Benzinga Fintech Summit alumnus.

Why It’s Important

The deal not only expands Plaid’s reach beyond its present 25 percent of U.S. financial accounts, but also positions the firm to penetrate the brokerage and wealth management spaces. Quovo’s traditional customers include Vanguard, Stifel Financial Corp (NYSE: SF), John Hancock, Betterment and Wealthfront.

Management also expects the union to reveal a more comprehensive view of consumer finances by linking files across lending, banking, brokerage and other accounts.

"It creates a more holistic financial picture," Perret told CNBC. "That's crucial when you think about the future of finance becoming more digital."

The expansion may entice additional investments in Plaid, which already boasts contributions from Goldman Sachs Group Inc (NYSE: GS), Citigroup Inc (NYSE: C), American Express Company (NYSE: AXP) and Alphabet Inc Class A (NASDAQ: GOOGL).

What’s Next

At the deal’s completion, the two services will merge into a single platform.

“It is our sincere hope that it ushers in a new wave of innovation, from the smallest startups being founded today to disrupt the status quo, all the way to the largest banks in the world that are looking to supercharge their customer relationships with data,” Quovo management said in their release.

Related Links:

Plaid: The Fintech Link Between Banks And Startups

Plaid, The Middleman Between Banks And Fintech Startups, Raises $250M


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