Visa to acquire Plaid

Visa announced it has signed a definitive agreement to acquire Plaid Technologies for a total purchase consideration of $5.3 billion.

Plaid, which was valued at ~$2.65b in a 2018 funding round, is the bridge between financial institutins and app developers building financial products that require consumers to share their financial information such as Acorns, Betterment, Chime, Transferwise and Venmo. Today, one in four people with a US bank account have used Plaid to connect to more than 2,600 fintech developers across more than 11,000 financial institutions.

Visa’s acquisition of Plaid represents both an entry into new businesses and complementary enhancements to Visa’s existing business. First, Plaid’s fintech-centric business opens new market opportunities for Visa both in the US and internationally. Second, the combination of Visa and Plaid provides the opportunity to deliver enhanced payment capabilities and related value-added services to fintech developers. Finally, the acquisition will enable Visa to work more closely with fintechs through all stages of their development and drive growth in Visa’s core business.

“We are extremely excited about our acquisition of Plaid and how it enhances the growth trajectory of our business. Plaid is a leader in the fast growing fintech world with best-in-class capabilities and talent. This acquisition is the natural evolution of Visa’s 60-year journey from safely and securely connecting buyers and sellers to connecting consumers with digital financial services. The combination of Visa and Plaid will put us at the epicenter of the fintech world, expanding our total addressable market and accelerating our long-term revenue growth trajectory.” – Al Kelly, CEO and chairman of Visa.

“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. 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.” – Zach Perret, CEO and cofounder of Plaid.

The transaction is subject to regulatory approvals and other customary closing conditions. Visa will fund the transaction from cash on hand and debt issuance at the appropriate time. This transaction will have no impact on Visa’s previously announced stock buyback program or dividend policy. The transaction is expected to close in the next three to six months.