Skyflow and Plaid partner in effort to bolster fintech data security
Skyflow, which sells data privacy tools for corporate customers, this morning announced a partnership with Plaid, a unicorn that helps pass fintech data between parties through an API.
TechCrunch most recently covered Skyflow when it secured an outsized Series B late last year, a funding event that came after the company raised a Series A less than a year prior. Plaid -- a company that we've covered regarding its products, fundraising and abortive attempt to sell to Visa -- needs little introduction at this point.
We caught up with Skyflow CEO Anshu Sharma to noodle on the partnership, which he described in a phone call as a way to create pre-configured data "vaults" for Plaid customers. The gist is that Plaid users can store their sensitive user data inside Skyflow quickly using its own API, without a speed penalty when it comes to accessing information.
Sharma also stressed that due to the technology that underpins Skyflow -- polymorphic data encryption -- users of his company's data storage system can still run workflows and analysis on their information without decrypting it.
The question at this juncture is simply how many Plaid customers want a data storage solution of the type that Skyflow offers. (TechCrunch has a longer dig into how the startup's technology works here, from our first coverage of the company.)
The answer could be a fair number.
Skyflow has stayed in TechCrunch's vision because of its rapid growth. When it closed its Series B last year, Sharma said that his company had grown around eightfold in the preceding three quarters. In our interview regarding the Plaid partnership, Sharma added that while his company's fiscal first quarter doesn't close for another week and change, Skyflow had already collected around twice as much "contracted ARR," or contracted annual recurring revenue, as it managed in Q4 2021. (It's time for Skyflow to stop sharing comparative numbers and move to hard metrics, given that the company's next round, a Series C, is decidedly not early stage, I hasten to add at this juncture.)
Flipping our perspective, what does the partnership mean for Plaid? I'd hazard that Plaid views data privacy in the fintech space as a key plank undergirding its future; if consumers lose faith that using fintech apps and services is secure, their interest in connecting with said products could decline. That would erode Plaid's long-term potential. So, data privacy matters quite a lot to Plaid, and Skyflow was willing to cook up a special variation of its standard product recipe just for the fintech API company's customers. Everyone wins? We'll see.