Plaid sells to Visa for $5.3 billion
Emailed on January 17th 2020 in The Friday Forward
Visa agreed to buy Plaid, a San Francisco-based provider of analytics software for accessing transaction data, for $5.3 billion in cash.
Plaid is a company that many of us use, but few of us know. If you've used an app that you connected with your bank account (like Coinbase, Venmo, Robinhood), there's a good chance you've used Plaid.
And if you are familiar with Plaid, you're probably amazed at how many banks they integrate with. That's what has always fascinated me.
As it turns out, Plaid doesn't *really* integrate with banks, or at least not through an API. Plaid works by scraping the front end website of your bank and using the user credentials you give it to login. Then they scrape the data they provide to apps using the Plaid API (like transaction data). All of this is encrypted, but still pretty wild to think about.
Plaid had raised over $300 million in VC funding, most recently at a $2.3 billion post-money valuation in late 2018. Backers include Spark Capital, NEA, Kleiner Perkins Growth, NEA, Citigroup, Goldman Sachs, Index Ventures, and Andreessen Horowitz, Visa, and MasterCard. The $5.3 billion sale price is said to include around $400 million tied to retention bonuses and other Plaid employee compensation.
As of December, Plaid said one in four people in the U.S. with bank accounts have connected to the fintech company through an app.