BY Richard Summerfield
Payments giant Visa Inc has agreed to acquire FinTech start-up Plaid Inc in a deal worth $5.3bn. The deal is expected to close in the next three to six months, pending regulatory approval and customary closing conditions.
In late 2018, Visa and rival Mastercard both made “strategic investments” in Plaid as part of a $250m Series C funding round which valued the company at $2.65bn. A little over a year later, Visa has returned to acquire the rest of the company.
Plaid develops financial services application programming interfaces (APIs) and helps developers share banking and other financial information more easily and thus is a logical target for Visa. Since launching in 2013, the company has begun to work with over 11,000 financial institutions across the US, Canada and Europe and connects to more than 200 million consumer accounts. Plaid’s software enables providers of financial technology to connect to the bank accounts of their customers.
Visa said it will fund the deal using cash on hand as well as debt that will be issued at a later date. The acquisition will not impact upon Visa’s previously announced stock buyback or dividend plans.
“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business,” said Al Kelly, chief executive and chairman of Visa. “Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. The acquisition, combined with our many fintech efforts already underway, will position Visa to deliver even more value for developers, financial institutions and consumers.”
“Plaid’s mission is to make money easier for everyone, and we are excited for this opportunity to continue delivering on that promise at a global scale,” said Zach Perret, chief executive and co-founder of Plaid. “Visa is trusted by billions of consumers, businesses and financial institutions as a key part of the financial ecosystem, and together Visa and Plaid can support the rapid growth of digital financial services.”