Visa, in a press release, announced that it has agreed to purchase Plaid, a startup that simplifies and secures the process of connecting bank accounts to various FinTech apps. According to the deal, Visa will pay a total of $5.3 billion to buy Plaid.
In the eight years of journey, Plaid’s has grown beyond expectations with pretty huge investments and customer base. In the 2018 winter, its valuation had reached $2.65 billion, with a funding of $250 million. A doubled valuation amount of Plaid is evident as the new acquisition comes up.
Plaid products can be used for thousands of apps, including major players such as Venmo, Square Cash, Chime, Acorns, Robinhood, and Coinbase. According to Jeff Kauflin, a FinTech expert, the collaboration of Plaid with the largest FinTech apps in the US is one of the main reasons Visa’s acquisition. This lets Visa get a large number of customers unprecedentedly.
In 2019, Plaid expanded its services to the U.K., Spain, France, and Ireland. With exceptional dominance at the global level, Visa can easily expand Plaid globally.
“Plaid is a leader in the rapidly-growing FinTech world with best-in-class facilities and talent. The acquisition, combined with our many FinTech efforts already underway, will position Visa to offer even more value for developers, financial institutions, and consumers,” said Al Kelly, CEO and chairman of Visa.
As Visa closes the acquisition, it is expected to offer unparalleled benefits to developers, financial institutions, and consumers. Visa and Plaid can support the growth of digital financial services, Zach Perret, CEO and co-founder of Plaid said.
At the same time, many FinTech apps, which are customers for both Visa and Plaid, have come up with louder appraisal for this acquisition. Dan Schulman, President and CEO of PayPal, sees this combination as a vast opportunity for the company to expand the business.
According to Visa, the acquisition will close in six months, and it’s paying for the purchase with $4.9 billion in cash and $400 million in stock.
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