Visa acquires fintech startup Plaid for $5.3 billion
Visa has announced that it has agreed to purchase Plaid as part of a deal worth $5.3 billion. The acquisition values the fintech company at around double its valuation following a 2018 Series C funding round.
Plaid is behind financial services APIs used by the likes of Coinbase, Gemini, Venmo and Transferwise. Its software allows for easier sharing of financial details, making it simpler to connect services to bank accounts. Plaid says the acquisition will help it continue to "accelerate the success of the fintech ecosystem".
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Visa is viewing the acquisition as a way to not only complement its existing business, but also to branch out into new areas. It says that it envisions the acquisition as helping it to "deliver enhanced payment capabilities and related value-added services to fintech developers", as well as enabling Visa to "work more closely with fintechs through all stages of their development and drive growth".
The deal has been welcomed by numerous other companies operating in financial services, with JPMorgan saying that the acquisition will give consumers more security and control over how their financial data is used. PayPal was also positive, saying that the coming together of Plaid and Visa would enable it to enhance its own products.
Announcing the acquisition by Visa in a blog post, Plaid CEO and co-founder Zack Perret said he could not be more excited about the future:
Today marks an important milestone for our company and for fintech. What started with two founders building in a cramped conference room has become an incredible network that enables millions of consumers to interact with over 2,500 digital finance products. When we began our journey, nobody had heard of fintech -- and today we have a growing fintech ecosystem that is significantly improving the way that consumers live their financial lives. Consumers now rely on fintech services in so many ways: to pay their bills, to send money to friends, to grow their savings, to manage their student loans, and to create budgets they rely on to reach their goals.
Joining forces with Visa, a brand that is trusted by billions of consumers, and financial institutions in over 200 countries and territories, represents an incredible opportunity to continue to scale our 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.
The deal is expected to close in the next three to six months, subject to the usual regulatory approvals.