Chances are slim that Plaid will now seek another merger partner that is off sale for Visa at $ 5.3 billion.
Instead, fintech is likely to go public through a traditional initial public offering, a special purpose acquisition vehicle, or a direct listing, five fintech bankers and venture capitalists. Baron’s.
One venture capitalist said, “Plaid IPOs or SPAC’d are likely to be found.”
Another banker said, “This is SPAC city.”
Plaid’s spokesperson declined to comment.
SPACs have emerged as the busiest segment of the IPO market. There were 248 so-called blanc-check companies that went public in 2020 — more than half the number of all IPOs that year — raising $ 82.3 billion, Diaglic said. $ 82.3 billion is approximately 50% of the $ 167.4 billion raised by the entire IPO market in 2020.
Blanc-Czech companies have been aggressive with FinTech. Earlier this month,
Social capital hedosopia
(Ticker: IPOE), the latest blanc-check company from venture capitalist Chamath Palihapatia, agreed to merge with online personal finance company Social Finance, or Sophie, in a $ 8.6 billion deal.
Folly Trusmin Acquisition Corp II
(BFT), William P. SPAC, from Foley II, is purchasing payment platform PaySafe in December for $ 9 billion. United Bulk Mortgage, a major mortgage lender, merging with Gores Holdings IV (GHIV), is the empty check company of the Gores Group in a $ 16.1 billion transaction. United Wholesale is scheduled to trade on the New York Stock Exchange later this month.
Founded in 2013, Plaid’s platform lets users connect their bank accounts to finance apps and transfer money. For example, the technology of Plaid allows Venmo customers to pay their friends and family. The plaid investment platform works with other well-known fintechs including Robinhood; TransferWise, which provides international money transfers; And Coinbase, a digital currency exchange. It employs 600 people.
San Francisco Fintech has raised $ 310 million in funding. This includes 2.8 million seed rounds since 2013 and 12.5 million round rounds in 2014. Both Visa (V) and
(MA) invested a $ 250 million series round of plaid in 2018.
Another banker said, “It would be hard for plaid investors to wait to see how close they came, another banker cited the sale near Visa.”
A Plaid spokesperson said its investors are “committed to supporting Plaid’s path as an independent company and our long-term growth path.”
Visa agreed to buy Plaid in January 2020 for $ 5.3 billion. The deal, which did not include a breakup fee, would be Visa’s largest share. The companies agreed to end the $ 5.3 billion transaction late Tuesday after the judicial department filed a lawsuit to block the deal. The DOJ alleged that the acquisition would allow Visa to eliminate a competitive threat to its online debit business before giving Plaid a chance to succeed. In a statement, Assistant Attorney General Maken Delrahim said that now that Visa has abandoned its anticompetitive merger, Plaid and other future fintech innovators are free to develop a potential alternative to Visa’s online debit services.
Visa said in a separate statement, believing it would win in litigation. But the pace of a multiyear regulatory review “was not compatible with the fast-paced realities of a startup – and delaying another year or more is not in the best interests of our customers, the financial system, or the consumers themselves,” Zach said. Perrett, co-founder and CEO of Plaid in a blog post.
A spokesperson said that Plaid’s customer base has grown 60% in the past year as more people have gone digital. The Kovid-19 epidemic has caused many consumers to no longer enter bank branches in cash or physically. Plaid focuses on “building out” [its] The generous growth potential that exists for Plaid in the form of products and digital development continues to adjust, ”the spokesperson said.
The DOJ lawsuit against Visa is the latest sign that regulators are concerned about the power held by Silicon Valley veterans
(GOOG). Facebook in particular has been widely criticized for allowing dissemination on its site, which is said to have contributed to the attack on the US Capitol last week.
Matthew Epstein said the managing partner of a fintech-focused investment bank, a boutique of the Visa-plaid merger, and Matthew Epstein, said, “I’m not surprised that they crushed it.” Regulators said that big tech companies are buying new providers early in their life cycle, Epstein said.
“The general consensus in Washington is that there has been insufficient enforcement of antitrust rules and is causing problems,” Epstein said. “Administration is not going to change [the scrutiny]. Visa may have decided that this is a situation where they cannot fight city hall. “
Write Louisa Beltran at [email protected]