Plaid raised a new round of capital that nearly triples its valuation a few months after a deal to be bought by Visa fell apart.
The fintech company announced a $425 million Series D funding round on Wednesday, led by Altimeter Capital with participation from new investors, Silver Lake and Ribbit Capital. Earlier investors Andreessen Horowitz, Index Ventures, Kleiner Perkins and New Enterprise Associates also added to the round.
The new financing boosts Plaid’s valuation to $13.4 billion, according to a 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 San Francisco-based start-up’s previous valuation. The Department of Justice later sued to block the deal, alleging that it would limit competition in the payments industry. A few months later, Visa scrapped its takeover efforts. The companies said the decision to end the merger was mutual.
Plaid’s technology links bank account to fintech apps like Venmo, Robinhood and Coinbase — all of which have seen eye-popping growth during the pandemic. Plaid also added Google and Microsoft as customers last year, and said its customer base grew by 60% in 2020 amid the surge in digital finance.
CEO Zach Perret said the latest cash injection would help Plaid increase headcount, which already grew by 40% last year, and keep pace with demand. He pointed to new digital adopters like his parents, whose 70-year-old peers are recommending online finance apps to manage spending.
“Our market is seeing a sea change, with consumers that we never thought would be embracing digital finance engaging with it in a big way,” Perret told CNBC in a phone interview.
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 spent the past decade in venture capital, was an early investor and sits on the start-up’s board.
“A new era of finance is underway, and Plaid is in a strong position to help develop the digital ecosystem that delivers the types of tools and services consumers want, at scale,” Meeker told CNBC in an email.
As far as plans to take Plaid public, Perret said there’s “nothing on the near-term horizon.” “But long term, that is certainly the direction we’d like to go,” he said.