SaaStr: 258: Plaid CEO and Co-Founder Zach Perret on How to Build a Platform that Fuels an Ecosystem

**SPEAKER_1** (0:01)
This is SaaStr's Founders' Favourite Series, where you can hear some of the best of the best from SaaStr speakers. This is where the cloud meets.
We're already counting down to SaaStr Annual 2020 For our loyal podcast listeners, we want to give you $100 off towards your ticket. Just buy your ticket using code FAVE100. Up today, Plaid Co-Founder and CEO, Zach Perret.

**Ari Levy** (0:36)
I'm Ari from CNBC. This is Zach from Plaid. And well, it's interesting because you're not a SaaS company.
So we're at SaaStr, but we'll talk about what it's like to not be a SaaS company at SaaStr. SaaS-ish. But first, just for people who don't have a good idea of what Plaid does, maybe give a kind of brief overview.

**Zach Perret** (0:56)
Sure.
So, Plaid, we build the infrastructure that let consumers interact with their bank accounts on the web. The core thesis behind it is banking was built for a world that didn't envision the internet. And as such, most things that we do in our financial lives are frustrating, difficult. They require you to walk into a bank branch, talk to a banker, send in a fax, print out 50 pages of bank statements in order to apply for a loan. All those things are kind of frustrating and annoying. And so what we build is the infrastructure that lets you programmatically interact with your bank account. Think of us taking your bank account, wrapping a set of APIs around it, and then enabling you to interact with that bank account through any application that you want to out there on the web. Easy way to think of it is Venmo was one of our first customers.
We do the connectivity between Venmo and the bank account, allowing the two to talk to each other and allowing you as a consumer to come to Venmo and say, hey, link my bank account, move money in and out. So infrastructure for FinTech is a shorter way to say it.

**Ari Levy** (1:52)
And give a sense of, so I, as a consumer, don't know Plaid necessarily. I never know that.
But I never know that I'm interfacing with it. What's the difference in sort of a Plaid world versus a pre-Plaid world and what my experience is as a consumer?

**Zach Perret** (2:08)
Yeah. So as a consumer, the way that you interacted with your finances on the web pre-Plaid was doing a variety of manual processes. So if you've ever had to start a new job and walk in with a voided check and then they take that voided check and they figure out how to process your payroll, that's pre-Plaid. Or if you've ever gotten a two-cent and a four-cent deposit into your account as you're trying to set up direct deposit or payments transfers, that's a pre-Plaid world.
Or frankly, using your debit card or credit card to do all sorts of payments that you really should be just doing directly from your bank account. Applying for a loan, printing out pages of documentation. If you've ever applied for a mortgage, there's 50 to 70 pages of documentation per mortgage. And so we build all the infrastructure to digitize that.

**Ari Levy** (2:53)
And so instead of getting that two to four-cent deposit in my bank and having to acknowledge that I got them and then waiting a few more days, what happens now?

**Zach Perret** (3:01)
It's inset. You link a bank account and then you can immediately do what you want to do.

**Ari Levy** (3:05)
And you work with how many financial institutions?

**Zach Perret** (3:07)
So in our backend, we've integrated with about 10,000 financial institutions in the US and Canada, which is substantially all. Our lawyers say that substantially all means almost everyone.
And so about 10,000 in the US and Canada, and then about about three to four thousand different FinTech applications that have meaningful size and 70,000 more that have almost no size. So lots of FinTech and then lots of lots of banks in the backend.

**Ari Levy** (3:33)
And so you've had a lot going on in the last couple of months. In December, you raised $250 million at a reported $2.7 billion valuation.
And in January, the following month, you spent a reported $200 million on QuoGo. So raise $250, reportedly spend $200. Are those related?

**Zach Perret** (3:53)
Reporters report things, so I can't confirm any of those numbers. So yes, yeah, of course. So we were, I'll talk a little bit about the story. We were in the midst of doing our series C fundraisers, fortunate to have a really great set of investors and the process was going quite well.
Around the same time, this conversation that we've been having for a long time with the Quovo team kind of reached a point where it made sense to think about joining forces. So we build integrations into bank accounts, focused on letting you interact with your money and your bank account in whatever way you want to in the web. Quovo had focused on investment accounts and allowing you to programmatically interact with your investment accounts through third party applications. And there's actually a really nice synergy between those two to use the dreaded term. And so as we were having this conversation, we did of course raise a little bit more money in that round in order to enable the acquisition. We couldn't be more excited with how it's gone so far. You know, people ask if we had an acquisition strategy.