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Visa connects with Plaid for USD 5.3bn
Posted on Tuesday, 14 January 2020 10:06
Visa is tapping into the increasing use of financial technology (fintech) applications and noncard payments by acquiring financial services application programming interface startup Plaid for USD 5.30 billion.
The privately-held, seven-year-old company is headquartered in San Francisco, California and works with the majority of the largest fintechs in the US, such as Venmo, Square Cash and Acorns.
Plaid connects these payment platforms and many of the biggest lenders - over 11,000 financial institutions across the US, Canada and Europe to be precise - to the bank accounts of their users to transfer money.
The group is backed by high-profile investors, including Mary Meeker and Andreessen Horowitz, and is believed to have last raised USD 250.00 million in a series C round in December 2018 for a post-money valuation of USD 2.65 billion.
Later, it was revealed that two of the world’s largest credit card companies - Mastercard and Visa - had both participated in the funding on the quiet.
Even before this round, the platform had attracted the likes of Goldman Sachs, Google and Spark Capital.
According to a Forbes report, Plaid doubled the number of customers last year to 2,600, expanded outside the US to the UK, Spain, France and Ireland and had revenue of between USD 100.00 million and USD 200.00 million.
In a conference call with analysts after the deal was announced, Visa chief executive, Al Kelly, said the deal is a strategic move that would pay off for at least a decade into the future.
He noted the acquisition should help expand the company’s own total addressable market, not to mention its relationships with fintech companies,
Visa’s presentation indicates the percentage of internet-enabled consumers using at least one fintech app rose by a compound annual growth rate of 43.0 per cent from 18.0 per cent in 2015 to 75.0 per cent in 2019.
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