PayPal veteran Jim Magats is named CEO of MX, the startup that connects banks and fintech players

MX, the startup competing against Plaid to help connect financial institutions and fintech players, is naming PayPal executive Jim Magats its new CEO, CNBC has learned.

Magats, a nearly two-decade PayPal veteran who was most recently senior vice president for omni payments solutions, is set to start at Utah-based MX in mid-August, according to MX founder Ryan Caldwell.

“We’re thrilled with the resonance that we’ve had with Jim, being a tenured executive in the space who fully understands not just the payments world, but the data and the connectivity world and really gets what MX is about,” Caldwell said in an interview.

MX, like rivals Plaid and Yodlee, has benefited from and helped facilitate the growth of the U.S. fintech ecosystem in recent years. The company uses software called application programming interfaces to help banks and fintechs securely “talk” to each other in terms of transactions and account data.

Magats is taking over at an interesting time: He is replacing Shane Evans, who was named interim CEO in January, when the company was preparing for an IPO or possible sale.

MX, which was valued at $1.9 billion in a funding round last year, had been seeking a transaction at a valuation of at least $5 billion, a person with knowledge of the matter said at the time.

But since then, the market for IPOs has been mostly shut amid plunging equity prices, especially for formerly high-flying technology names. PayPal, for instance, was worth well over $300 billion at its peak last year; its market capitalization is now just under $100 billion.

That has weighed on the valuations of pre-IPO companies, as evidenced by the haircuts that prominent firms including Swedish fintech Klarna and payments giant Stripe have taken in recent weeks.

Magats said in a Zoom interview this week that an IPO isn’t imminent and that raising further funds isn’t needed in the “foreseeable future.”

“The focus is building great products and experiences and scaling them and doing it in a secure manner and working with the financial institution and partnership ecosystem,” Magats said.

An IPO isn’t “in any way the focus that I have coming to this company.”

He declined to comment on whether MX would need to reduce its head count. Layoffs have become widespread in the startup world as investors push them to harden their finances for tougher times ahead.

Magats spent 18 years at PayPal, helping its international growth and fostering partnerships with financial incumbents who may have been reluctant to work with a disruptor.

He said he joined MX because he saw the potential for a two-sided network between traditional financial players and fintechs.

“When I got to learn about MX and the mission, I got really excited because I think this is where fintech is going, around having an open, secure data platform where people can contribute data to and actually cultivate that data thereafter,” Magats said.