Zach Perret, CEO and co-founder of Plaid, speaks at the Silicon Slopes Tech Summit in Salt Lake City, Utah, USA, on January 31, 2020.
George Frey | Bloomberg via Getty Images
Plaid has raised a new round of capital that nearly tripled its valuation a few months after a deal that Visa bought fell apart.
The fintech company on Wednesday announced a $ 425 million D-Series financing round, led by Altimeter Capital with the participation of new investors, Silver Lake and Ribbit Capital. Former investors Andreessen Horowitz, Index Ventures, Kleiner Perkins and New Enterprise Associates also added to the round.
According to the person familiar with the matter, Plaid’s valuation increased to $ 13.4 billion, which asked not to be named because the details were private. The Information first reported that Plaid was raising money.
Early last year, Visa agreed to buy Plaid for $ 5.3 billion, which at the time was double the value of the previous valuation in San Francisco. The Justice Department later sued to block the deal, claiming it would restrict competition in the payments industry. A few months later, Visa scrapped its takeover efforts. According to the companies, the decision to end the merger is reciprocal.
Plaid’s technology links bank accounts to fintech programs such as Venmo, Robinhood and Coinbase – all of which saw noticeable growth during the pandemic. Plaid also added Google and Microsoft as customers last year, saying its customer base grew by 60% in 2020 amid the increase in digital financing.
CEO Zach Perret said the latest cash injection would help Plaid increase the number of people, which had already grown by 40% last year, and keep pace with demand. He pointed to new digital entrepreneurs, such as his parents, whose 70-year-old peers recommend online funding programs to manage spending.
“Our market is seeing a change in the sea, with consumers we never thought would embrace digital finance, and they will be heavily involved in it,” Perret told CNBC in a telephone interview.
Plaid has attracted a star-studded list of investors in Silicon Valley and Wall Street, including the venture of Visa, Citi, Google and Goldman Sachs. Mary Meeker, the former technology investment banker who has spent the past decade in venture capital, was an early investor and sits on the company’s board.
“A new era of finance is underway, and Plaid is in a strong position to help develop the digital ecosystem that provides the kinds of tools and services that consumers want on a large scale,” Meeker said in an e- mail told CNBC.
As for plans to make Plaid public, Perret said there is ‘nothing on the short-term horizon’. “But in the long run, this is definitely the direction we want to take,” he said.