Visa to buy fintech startup Plaid in US$5.3b deal

Darnell Taylor
January 16, 2020

At the time, Plaid was valued at $2.65 billion, exactly half its valuation with the acquisition.

Visa Inc. has landed a blockbuster deal to acquire Plaid, a data network that connects bank data to apps like Venmo, Chime, Betterment and other major fintechs.

Visa expects the deal to close in the next three to six months and benefit its adjusted earnings per share at the end of the third year.

The company is "increasingly trying to move from being strictly focused on payments to being focused on the movement of funds for any goal", according to its conference call following the deal announcement.

DLA Piper served as privacy diligence counsel for Visa in its US$5.3 billion acquisition of San Francisco-based fintech company Plaid.

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"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". Plaid is a leader in the fast-growing fintech world with the best capabilities and talent in its class.

Visa was actually an investor in Plaid's most recent round of funding.

Visa is buying Plaid Inc.

While Plaid may not be as well known as some of its clients, approximately one in four people with a bank account in the US. UU. Now, Visa is teaming with JPMorgan to ensure Plaid's APIs only harvest user data "appropriately". Rather than merely connect payment industry players when someone wishes to make a card purchase, Visa is trying to tap into newer financial-technology experiences, including by providing a suite of services to developers. "It will help expand the company's. relationships with fintech companies, as well as boost Plaid's growth", CNBC's Kate Mooney writes.

And just before the end of the year, Visa formed a partnership with Global Processing Services, a United Kingdom -based payment technology firm that will allow Visa to accelerate its fintech outreach in Europe while both companies promote faster payments to support digital commerce. The acquisition will not have any effect on Visa's earlier announced stock repurchase program or dividend guidelines. The bank card and funds company reports in its presentation to shareholders that fintech adoption (the percent of "cyber net enabled possibilities the usage of as a minimum 1 fintech app") is rising at a 43% compound charge. Zach Perret, who founded the Plaid, will remain the CEO of the company.

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