Visa has agreed to acquire Plaid, a network that makes it easy for people to connect their financial accounts to the apps, for $5.3 billion.
Plaid raised $250 million in a 2018 Series C funding round that launched its valuation to $2.7 billion. Visa, American Express, Norwest Venture Partners, Kleiner Perkins, Spark Capital, Index Ventures, PSP Investments, Citi Ventures and Andreessen Horowitz are the investors of Plaid.
Plaid’s products enable consumers to share their financial information with apps and services such as Acorns, Betterment, Chime, Transferwise and Venmo. Consumers rely on these apps and services to help plan their spending, increase their savings and monitor their investments.
Plaid says 75 percent of the world’s internet-enabled consumers used a fintech application to initiate money movement in 2019 versus 18 percent in 2015. Today, one in four people with a U.S. bank account have used Plaid to connect to more than 2,600 fintech developers across more than 11,000 financial institutions.
Visa CEO Al Kelly said: “The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
Plaid, which was launched in 2013, says it integrates with more than 11,000 banks and connects to more than 20 million consumer accounts. Plaid said its customer base doubled from 2017 to 2018 and has expanded to the U.K. and Canada.
Zach Perret, CEO and co-founder of Plaid, said: “Visa is trusted by billions of consumers, businesses and financial institutions as a key part of the financial ecosystem, and together Visa and Plaid can support the rapid growth of digital financial services.”
Visa’s acquisition of Plaid represents both an entry into new businesses and complementary enhancements to Visa’s existing business.
First, Plaid’s fintech-centric business opens new market opportunities for Visa both in the U.S. and internationally.
Second, the combination of Visa and Plaid provides the opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers.
Finally, the acquisition will enable Visa to work more closely with fintechs through all stages of their development and drive growth in Visa’s core business.
The transaction is expected to close in the next three to six months.