PayPal veteran Jim Magats has been 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 CEO Jim Magats as its new CEO, CNBC has learned.

Magats, a PayPal veteran of nearly two decades who most recently served as senior vice president of omni-payment solutions, will start at Utah-based MX in mid-August, according to MX founder Ryan Caldwell.

“We’re excited about the resonance that we’ve had with Jim, as an established leader in the space who fully understands not only the payments world, but the data and connectivity world and really understands what MX is all about,” Caldwell said in an interview.

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

Magats takes over at an interesting time: He replaces Shane Evans, who was named interim CEO in January as the company prepared for an IPO or possible sale.

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

But since then, the market for IPOs has largely been shut down due to falling stock prices, especially for formerly high-flying tech names. PayPal, for example, was worth well over $300 billion at its peak last year; the market value is now just under 100 billion dollars.

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 is not imminent and that there is no need to raise additional funds in the “foreseeable future.”

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

An IPO is not “by any means the focus I have on this company.”

He declined to comment on whether MX would need to reduce its workforce. 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 players who might have been reluctant to work with a disruptor.

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

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