Visa to Acquire FinTech Tool Plaid
Over the past few years, the FinTech Plaid has managed to make a name for itself not only with observers and investors but also with the millions of customers who use their product. At the same time many more have likely encountered Plaid and not even known it since it merely acts as a mediary between banks and various financial apps. Now it seems that we’ll soon know Plaid another way: as a part of Visa. That’s because, as CNBC reports, the credit card company has announced that it’ll acquire the startup for $5.3 billion.
As mentioned, Plaid’s technology powers a number of popular personal finance apps, allowing them to securely obtain “read-only” data from bank accounts such as balances and transactions. In fact in December Plaid revealed that 25% of Americans with bank accounts had connected them to Plaid.
Not only is the $5.3 billion Visa will reportedly pay for Plaid a massive number but is also nearly double what private valuations previously placed the company at. Plaid’s last funding round (a Series C) raised $250 million at a valuation of $2.7 billion. Interestingly, in addition to Visa being a prior investor in the firm, Mastercard, as well as a venture arm of American Express, have also put money into Plaid over the years.
In a blog post announcing the acquisition, Plaid co-founder and CEO Zach Perret wrote, “Joining forces with Visa, a brand that is trusted by billions of consumers, and financial institutions in over 200 countries and territories, represents an incredible opportunity to continue to scale our products. We’ll be able to lean on their brand, resources, and international footprint to benefit our customers, our partners, and the markets we serve.” Perret concluded his post saying “I could not be more excited for the future of Plaid, and the future of FinTech. Onwards!”
Meanwhile, in a call with investors, Visa CEO Al Kelly said that the acquisition was a long-term play. Kelly stated, “This fits well, strategically. We’re excited about new businesses and the ability for this to accelerate our revenue growth over time.”
Visa’s purchase of Plaid does seem to be a win-win for both companies as well as a massive deal for FinTech at large. While it’s clear that a number of consumers already know and trust Plaid’s services, having the backing of a big name like Visa only stands to further that faith. In turn the numerous apps that rely on Plaid could see a boost as well, making this perhaps the biggest FinTech news of the still-young year so far.