Days after Visa scooped up fintech startup Plaid for $5.3 billion, the company has doled out money to another fintech company. Visa has invested an undisclosed amount into Very Good Security (VGS), which helps fintech companies better protect their data.
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VGS works with startups like Brex and Petal to hide sensitive data and swap it for an alias of sorts. Per Cosmin Nicolaescu, head of engineering at Brex, VGS helps the team store sensitive information and act as a proxy between Brex and Mastercard.
In other words, VGS helps other companies with compliance, and safely handles things like credit card numbers to protect identities. As one website explained it, VGS customers can “issue credit cards without ever having to see a card number and they can run background checks without needing to hold Social Security Numbers.”
VGS last raised money in October 2019 for its $35 million Series B led by Goldman Sachs, according to Crunchbase. The company raised $8.5 million for its Series A in August 2018 with Andreessen Horowitz as the lead investor. Other investors in VGS include Vertex Ventures US and Max Levchin, the founder of Affirm.
VGS wants to make it easier for companies to build new fintech experiences and products, VGS vice president of business development strategy Peter Berg said in an email to Crunchbase News. Berg also used to be the head of Visa Ventures, according to his LinkedIn profile.
“There’s a need for specialized infrastructure to handle the toughest challenges in fintech. VGS is building that infrastructure and making it easier for companies to get value from sensitive data without compromising security or privacy,” Berg wrote.
This isn’t the first time Visa and VGS have worked together. Visa chose VGS as a partner for its Fintech Fast Track program earlier this year.
It’s worth noting that Visa has invested in over 46 companies to date, according to Crunchbase data. Beyond VGS, Visa has invested in a variety of companies like Square and Finix (which both help with payment processing) to Gojek, which is an Indonesian ride-hailing company trying to become a super app.
This week’s news contrasts slightly because of a very obvious focus: back-to-back deals solely focused on fintech. We’ll see if Visa’s 2020 kickoff plays out into a successful suite of finance services, in the year to come.
Illustration: Li-Anne Dias