WSGR Client Profile: Yodlee

In 1999, the founders of Yodlee came to Wilson Sonsini Goodrich and Rosati with an idea to transform the way consumers made financial decisions.

Fast forward to 2015.

Yodlee has grown into a cutting-edge public company that finds itself at the heart of many of today's most exciting industry trends: the move to cloud technologies, the emergence of Big Data, and the flexibility of open platform models. In its latest milestone, on August 10, 2015, Yodlee announced its sale to Envestnet, a leading provider of integrated portfolio, practice management, and reporting solutions to financial advisors and institutions.

This WSGR client profile offers some highlights of Yodlee's unique journey and the company's solid partnership with the technology transactions practice and other attorneys at Wilson Sonsini Goodrich & Rosati. From the earliest days of the engagement, WSGR has been committed to helping Yodlee execute on its unique vision and ideas.

A New Idea

Yodlee came to Wilson Sonsini Goodrich & Rosati while in development for a new service that had not been seen before: consumer financial account aggregation. Yodlee and its founders strongly believed that access to one's complete financial story could result in more informed financial decisions, and thus, had the possibility to drive a stronger economy.

Armed with this idea and a proposed technology to make it happen, Yodlee's early questions for the lawyers at WSRG were simply stated but extremely complex: Was this type of aggregation service legal and what were the repercussions associated with this new technology?

These are exactly the types of questions that drive the technology lawyers at Wilson Sonsini Goodrich & Rosati. One of the unique key attributes that the technology transactions attorneys bring to bear when working with clients in novel industries, like Yodlee, is the ability to assess never-before-seen business models. Clients from all sectors regularly seek the firm's counsel on unique new services based on the latest technologies, for which there is often no clearly defined legal precedent on which to advise them.

The technology transactions practice at WSGR was committed to helping Yodlee achieve its business objectives within the legal framework that existed at the time. WSGR had the judgment, expertise, and experience necessary to help Yodlee turn their innovative idea into a strong, thriving enterprise.

The Right Group for Technology

The technology transactions practice at Wilson Sonsini Goodrich & Rosati was formed in the late 1980s as a specialty group for transactions involving products, services, technology, and intellectual property rights.

Based in Silicon Valley—the global center of emerging technology—WSGR was keenly aware that the traditional ways of selling products just weren't applicable to the new technologies, new types of products, and innovative services being developed each day by entrepreneurs throughout the Valley. Further, Silicon Valley companies increasingly engaged in partnering transactions to accelerate their time to market through leveraging partner technologies. So, the practice grew as a group of specialists immersed in these emerging technologies and the industries in which they thrived.

Members of the technology transactions practice are among the nation's most sophisticated and experienced attorneys. WSGR is a firm that understands technology just as strongly as the firm understands the law and business. Companies like Yodlee come to WSGR not only for our experience in the law and ability to execute on transactions, but also for our in-depth knowledge of the very industries that continue to drive the growth of Silicon Valley and the global technology sector in the Internet age.

The technology transactions practice has never been a group of lawyers who only talk about the hundred different risks associated with a particular business model or transaction–we'd much rather use our energies and expertise to figure out the ways to avoid being a roadblock and actually help companies find a way to make their ideas happen.

That's what makes it fun for us.

The Yodlee Journey

Refining the Business Model

Working with like Yodlee required that the firm's attorneys understand the complex new aggregation technologies that Yodlee was creating, and required that our attorneys be able to balance the business and legal risks associated with such a disruptive new idea. The WSGR technology transactions lawyers, in collaboration with the firm's IP litigators, advised Yodlee on the legal risks and ways to minimize those risks in the Yodlee business model.

Contracting with End Users

After advising Yodlee on the business model and the legal issues surrounding that model, the technology transactions practice went to work implementing the agreements that necessary to build a user base. Originally a business-to-consumer product, WSGR worked with Yodlee to craft strong user agreements that addressed the related issues of data collection and consumer privacy, at a time before laws in these areas were as developed as they are now.

Negotiating B-to-B Agreements

Yodlee's business quickly evolved into a business-to-business service wherein Yodlee sold its service to banks and other financial institutions as a product that banks could offer to their customers. Working side-by-side with Yodlee's founders, CEO, and other executives, in the first two years of operation alone, WSGR executed on a dozen or so multi-year agreements for Yodlee's service with major financial institutions and other online service providers. Some of those agreements are still in place today.

Bringing In Value-Added Services

As Yodlee focused on its core strengths, Yodlee also sought to expand its service offerings to include new value-added services, through both acquisition and partnering. The business and legal issues associated with executing on these transactions, and then integrating the new services into Yodlee's offerings, are different from the customer-facing deals, and the firm's technology transactions lawyers are adept at understanding and advising on the subtleties.

Growing through Complex Distribution Channels

Yodlee also began to offer its service in partnership with other kinds of technology product and service providers, not just financial institutions. As Yodlee's business and service offerings grew more sophisticated, so did the related partner agreements. Yodlee needed to ensure that consumers are able to make an informed decision to accept the Yodlee service, when Yodlee itself may be a few steps removed from the consumer in the chain of service providers.

The technology transactions lawyers at WSGR understand that these multi-layered agreements can live for many years. We also know that our clients' businesses depend on our ability to get these transactions done.

Building the Ecosystem

As its services expanded and the Yodlee user base grew, it became clear to Yodlee that the company could be a platform for third party services. Once the company decided to pursue the developer platform model, Yodlee called on the WSRG technology transactions practice to help structure and implement the program based on the firm's experience with similar models, including API licensing and application development.

New Frontiers

As Yodlee began to harness the power of Big Data, the company looked to the technology attorneys at WSGR for advice on best practices in areas such as data licensing models. As part of Envestnet, Yodlee will continue its trajectory of success built upon a passionate belief in the power of the financially savvy consumer.

Beyond Technology Transactions

All along Yodlee's journey, the company has relied on WSGR for advice beyond technology transactions and agreements. The company has called on the full-service expertise of WSGR's corporate, litigation, and intellectual property attorneys, as well as professionals from other disciplines around the firm, when specific expertise is required.

A major highlight of the Yodlee's evolution and the firm's relationship with the company was advising Yodlee in their $75 million IPO in October 2014.

Participating in the due diligence process with the IPO underwriters and their counsel brought the technology transactions group full circle. As part of the process, WSGR's technology transactions attorneys helped the IPO underwriters to better understand the legal framework for the Yodlee service and how the law had developed in the fifteen years since the firm had first sat down with the company. Now there is more settled law around aggregation; what was once an innovative notion is now an accepted business model in many contexts. When Yodlee announced its sale to Envestnet on August 10, 2015, Yodlee relied upon the expertise of WSGR for the deal, and the technology transactions practice was a key part of the deal team, responsible for the intellectual property and commercial aspects of the transaction.

"The acquisition of Yodlee is a watershed moment in the financial technology industry. We have long admired Yodlee's innovative solutions and are excited to bring the companies together," said Jud Bergman, Chairman and Chief Executive Officer of Envestnet, in a company press release. "The union of these two pioneers will enable investors and the advisors who serve them to access and make better sense out of their disparate and complicated financial data. We believe this represents a quantum leap in accuracy and knowledge that will deliver better outcomes to improve the financial health of investors."

Clients, technologies, and industries evolve, but the capabilities and values that the attorneys in the technology transactions practice at Wilson Sonsini Goodrich and Rosati bring to clients remain the same: we are passionate about technology, committed to our clients' businesses, and we use our experience, judgment, and old-fashioned hard work to understand new ideas and to help bring them to market. This is what the WSGR did for Yodlee, and this what the firm continues to do for leading technology clients from throughout Silicon Valley and beyond.