Zach Perret Plaid

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Fintech adoption massively accelerated in 2020, with consumers unable to visit bank branches and managing their day-to-day financial lives from home. Now, they’ve turned to mobile banking and investing, using apps like Venmo, Robinhood, and Chime, as they create digital habits that are likely to stick.

That’s meant massive growth for Plaid, the data aggregator that sits behind the scenes of those popular apps, connecting them to the banking data they need to run.

“The past year has been one that we wouldn’t have expected, and certainly one that we couldn’t have scripted,” Zach Perret, co-founder and CEO of Plaid, told Insider.

On Wednesday, Plaid announced a $425 million Series D. The round values the startup at $13.4 billion, according to sources close to the company. 

The fundraise comes months after Plaid and Visa announced the termination of Visa’s proposed acquisition following an investigation by the Department of Justice into whether the deal was anticompetitive. Visa had first announced plans to acquire Plaid in January 2020, valuing the startup at $5.3 billion.

The Series D was led by Altimeter Capital, with participation from fellow new investors Silver Lake Partners and Ribbit Capital. Existing investors including Andreessen Horowitz, Index Ventures, Kleiner Perkins, New Enterprise Associates, Spark Capital, and Thrive Capital also participated.

While the jury is still out on which challenger banks and roboadvisors will win in the long run, an investment in Plaid is a bet that overall adoption of digital financial services is a trend with staying power. 

“With Plaid, as an investor, the great thing is you don’t have to pick,” Mark Goldberg, partner at Index Ventures and early investor and board member at Plaid, told Insider. 

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“If you just believe in the shift from old guard to new guard, then Plaid is going to get much bigger just on the basis of that secular shift,” Goldberg said.

Post-Visa, Plaid is on its way to an eventual IPO

In the months since the Visa acquisition was called off, Plaid has been meeting with investors and, in part, looking to deepen its bench of advisors to help it get ready for an eventual IPO. Altimeter, for one, has a track record of notable exits, including AirBnb, Roblox, Snowflake, and Uber. 

And Silver Lake is an investor in fintech unicorns including Klarna and SoFi, which is in the process of going public via Chamath Palihapitiya’s SPAC. 

“In addition to the focus on collaborating on the future of digital finance, we also wanted to be sure that we have firms that can help us think about increasing the growth and the scale of our company, and help us think about what’s required for an eventual, not immediate, public offering,” Perret said. 

In the meantime, Plaid will use this funding to invest in expanding the business.

“This round will enable us to reinvest in that digital financial future, to reinvest in the scale we’re seeing in the platform, and continue to expand the product set and the team behind it,” Perret said.

Plaid saw 60% growth in customers in …read more

Source:: Business Insider


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