Visa announced that it will acquire the US-based 8-year-old fintech startup Plaid for $5.3 billion. Plaid connects payment apps like Venmo and Square Cash to the user’s bank accounts to transfer funds. Plaid last year raised funding, and it was valued at $2.65 billion.
Plaid expanded its service to other countries.
Last year, Plaid doubled its number of customers to reach 2,600, and it expanded outside the U.S. to the U.K, Spain, France, and Ireland. According to Forbes, Plaid’d revenue last year was between $100 to $200 million. Zach Perret, who founded the Plaid, will remain the CEO of the company. Visa expects the acquisition to close in three to six months, pending regulatory approvals.
Visa will gain a new customer base.
The reason why Visa has acquired Plaid in such a huge amount is to expand into new businesses and gain access to a ballooning base of customers that it can sell additional payment services. Plaid works with the vast majority of the largest fintech apps in the United States, including Venmo, Square Cash, Chime, Acorns, Robinhood, and Coinbase. According to the announcement, Visa would pay $4.9 billion in cash and around $400 million of retention equity and deferred equity.