Visa has made a deal to acquire financial tech company Plaid for $5.3 billion—almost double Plaid’s last private valuation, according to CNBC.
The San Francisco-based company, founded by Zach Perret and William Hockey in 2013, has technology that powers roughly 2,600 fin-tech apps—like Acorns, Betterment, TransferWise, Robinhood and Venmo—by linking users’ bank accounts to more than 11,000 financial institutions.
Though Plaid has been around for less than a decade, it has become a key agent in the internet-enabled financial ecosystem. According to Visa, one in four people in the U.S. with a bank account has used Plaid, and 75% of the world’s internet-enabled consumers used a fin-tech app in 2019.
Plaid’s unified banking API has made business easier and stimulated growth in the sector, working as a middleman between banks and fin-tech startups just getting off the ground that are on tighter budgets with more technical limitations.
“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” said Al Kelly, CEO and chairman of Visa, in a statement.
The acquisition is expected to mutually benefit both parties. Plaid’s business has the capacity to open new market opportunities for Visa both in the U.S. and internationally; Plaid will have more opportunities to deliver enhanced payment capabilities and related value-added services to fin-tech developers.
“The acquisition, combined with our many fin-tech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers,” Kelly continued.
Per a spokesperson for Visa, the Plaid brand will operate as a standalone subsidiary of Visa. Plaid will continue to be led by Perret, its current CEO.
“Once the acquisition is closed, our goal will be to enable Plaid to thrive and grow with Visa resources,” the spokesperson said. One of these resources includes the strong relationships Visa has with well-established financial institutions, including PayPal and JPMorgan Chase.
The deal is subject to regulatory approval and other customary closing conditions, but it is expected to close in the next three to six months.
This transaction will have no impact on Visa’s previously announced stock buyback program or dividend policy.