Plaid co-founders William Hockey and Zach Perret
Payments giant Visa is buying Silicon Valley start-up Plaid for $5.3 billion, the companies announced Monday.
Plaid’s API software, often referred to as the “plumbing” behind fintech companies, lets start-ups connect to users’ bank accounts. It’s well-known among financial technology developers, but the average person interacting with it most likely wouldn’t recognize the name. High-profile Plaid customers include popular peer-to-peer payment app Venmo, mobile investing app Robinhood and cryptocurrency exchanges Coinbase and Gemini.
As of December, Plaid said 25 percent of people in the United States with bank accounts have connected to the fintech company through an app. Visa and rival Mastercard were early investors in the start-up, along with the venture arms of Citi and American Express.
Goldman Sachs — also an early investor — was exclusive advisor on the deal, according to a person familiar with the negotiations.
Plaid raised a $250 million Series C funding round in 2018 that launched its valuation to $2.7 billion. It also added widely followed venture capitalist Mary Meeker to the board of directors. The Wall Street Journal first reported the Visa acquisition.
In a call with investors Monday, Visa CEO Al Kelly said Plaid has seen a compound annual growth rate of roughly 100% since 2015. Kelly said the Visa deal will help expand its own total addressable market and relationships with fintech companies, and accelerate Plaid’s growth.
“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” Visa Kelly said in a statement Monday. “Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
Plaid has grown steadily with its list of customers since it launched in 2013. The company says it integrates with more than 10,000 banks and connects to roughly 20 million consumer accounts. While it does not give specific numbers or a full list of companies, Plaid said its customer base doubled from 2017 to 2018 and has expanded to the U.K. and Canada.
Plaid CEO Zach Perret said joining Visa would held the start-up continue to scale its 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 said in a blog post.