Plaid CEO and Co-Founder Zach Perret speaks during the Silicon Slopes Tech Summit in Salt Lake City, Utah, USA, on January 31, 2020.
George Frey | Bloomberg via Getty Images
Plaid raised a new round of capital that nearly triples its valuation a few months after a deal that Visa would buy collapsed.
The fintech company announced on Wednesday a $ 425 million Series D funding round, led by Altimeter Capital with the participation of new investors, Silver Lake and Ribbit Capital. Previous investors Andreessen Horowitz, Index Ventures, Kleiner Perkins and New Enterprise Associates also joined the round.
The new financing brings Plaid’s valuation to $ 13.4 billion, according to a person familiar with the matter, who asked not to be identified because the details were private. The Information first reported that Plaid was in the process of raising money.
Early last year, Visa agreed to buy Plaid for $ 5.3 billion, which at the time was double the previous valuation of the San Francisco-based startup. The Justice Department subsequently sued to block the deal, claiming it would limit competition in the payments industry. A few months later, Visa scrapped its acquisition efforts. The companies said the decision to end the merger was mutual.
Plaid’s technology links the bank account with fintech apps like Venmo, Robinhood, and Coinbase, all of which have seen spectacular growth during the pandemic. Plaid also added Google and Microsoft as customers last year, and said its customer base grew 60% in 2020 amid the rise in digital finance.
CEO Zach Perret said the latest cash injection would help Plaid grow its headcount, which already grew 40% last year, and keep up with demand. He pointed to new digital adopters like his parents, whose peers in their 70s recommend online finance apps to manage spending.
“Our market is undergoing a sea change, with consumers who we never thought would be embracing digital finance by engaging with it in a big way,” Perret told CNBC in a telephone interview.
Plaid has attracted a star-studded roster of investors from Silicon Valley and Wall Street, including the venture investment arms of Visa, Citi, Google and Goldman Sachs. Mary Meeker, the former technology investment banker that has spent the last decade in venture capital, was an early investor and sits on the board of the startup.
“A new era of finance is underway, and Plaid is in a strong position to help develop the digital ecosystem that offers the kinds of tools and services consumers want, at scale,” Meeker told CNBC in an email. .
Regarding plans to go public with Plaid, Perret said “there is nothing on the short-term horizon.” “But in the long run, that’s certainly the direction we’d like to go,” he said.