Plaid, a unicorn linking consumers’ bank accounts to financial applications, raised $ 425 million in Series D, it announced this morning. TechCrunch understands that the new capital injection, led by Altimeter Capital, values the company at about $ 13.4 billion.
It is not surprising that Plaid, a former takeover target for consumer credit giant Visa, is raising more capital. After the $ 5.3 billion sale to the larger company went through in January, it became clear that Plaid would be planning its own future, without a corporate parent.
When the Visa-Plaid agreement finally came to a standstill in light of the regulatory investigation, there was a chatter under startup and people daring that the sale was a good thing. Why? Because Plaid had a good 2020 and it was generally agreed that it was worth far more than what Visa agreed to pay.
The appreciation of the Series D confirms the sentiment. And it was not just the Altimeter that was willing to put capital into the company during its new valuation. The group was added by two more news investors, Silver Lake Partners and Ribbit Capital. Silver Lake is a private equity leviathan with tens of billions of dollars under management, while Ribbit is known for its myriad fintech bets.
In short, Plaid picked up in a single round an investor-scale hybrid, late-stage leadership and fine technical skills. A number of previous investors are also putting capital around.
TechCrunch spoke to Plaid CEO Zachary Perret about the deal, which TechCrunch announced in a brief phone call that Altimeter has been selected as its new main investor over other options due to the shared alignment regarding the future of financial services to consumers. He added that he is excited to learn from his trio of new fans, who will help the company build in the long run.
The CEO also mentioned a future IPO, though TechCrunch does not expect to see paperwork regarding a potential flotation of Plaid for some time; however, it was refreshing to hear how a manager admits he has future financial goals.
On the amount of capital he raised, Perret said it was the ‘right level’ of capital to get Plaid to invest in scale, both in terms of his team and his product range. The CEO also said that the funds could make his business viable.
The past 12 months for Plaid have been busy. Perret mentioned the period several times during the interview and explained how fast the world has developed regarding the digitalisation of financial services for consumers during the past year.
Finally, what about growth? What Plaid was willing to share on the growth front was light, and merely showed that it had increased its customers by 60% in 2020. Perret said the figure represents an acceleration from previous years. According to its CEO, Plaid grew by about 650% in the first quarter with about 650 staff members in the first quarter.
Plaid sits amid the fintech boom that TechCrunch has dealt extensively with over the past few quarters. In terms of external signals, the fact that we are looking at the companies that need to partially expand Plaid’s customer base is just as close as we can reach other growth meters. The specific signal is good for Plaid.
Let’s see how well the company can fend off local and international competition. It definitely has the funds now to do that.