Zach Perret, CEO and Co-Founder of Plaid, speaks during the Silicon Slopes Tech Summit on January 31, 2020 in Salt Lake City, Utah, United States.
George Frey | Bloomberg via Getty Images
Fintech firm Plaid has taken on a new round of capital that nearly triples its valuation a few months after the breakup of a business to be bought by Visa.
The company on Wednesday announced a $ 425 million Series D financing round led by Altimeter Capital with new investors Silver Lake and Ribbit Capital. Former investors such as Andreessen Horowitz, Index Ventures, Kleiner Perkins and New Enterprise Associates also contributed to the round.
The new funding raises Plaid’s valuation to $ 13.4 billion, according to one person familiar with the matter who asked not to be named because the details were private. The information first reported that Plaid was in the process of raising money.
Early last year, Visa agreed to buy Plaid for $ 5.3 billion, which at the time was double the previous valuation of the San Francisco-based startup. The Justice Department sued to block the deal, claiming it would reduce competition in the payments industry. A few months later, Visa scrapped its takeover measures. The companies said the decision to end the merger was a mutual one.
Plaid’s technology connects the bank account to fintech apps like Venmo, Robinhood and Coinbase, which have seen staggering growth during the pandemic. Plaid added Google and Microsoft as customers last year, and said the customer base had grown 60% in 2020 given the surge in digital finance.
CEO Zach Perret said the recent cash injection would help Plaid increase its workforce, which had already grown 40% last year, and keep pace with demand. He pointed to new digital users like his parents, whose 70-year-old colleagues recommend online finance apps to manage expenses.
“Our market is in a profound transformation, and consumers we never thought would take advantage of digital finance to a large extent,” Perret told CNBC.
Plaid has attracted a star-studded list of Silicon Valley and Wall Street investors, including the venture investing arms of Visa, Citi, Google, and Goldman Sachs. Mary Meeker, the former tech investment banker who has ventured for the past decade was an early investor and sits on the start-up’s board of directors.
“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 told CNBC in an email.
Regarding plans to bring Plaid to the public, Perret said “nothing is in sight in the short term”. “But in the long term this is certainly the direction we want to go,” he said.