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Why investors are excited to see the Plaid and Visa merger die

January 13, 2021, 3:48 PM UTC

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Visa and Plaid mutually agreed to end their $5.3 billion deal late Tuesday.

Roughly a year ago, Visa announced plans to acquire the fintech company, heralding a spate of deals in the financial technology space. But late last year, the Department of Justice sued to block the acquisition, alleging that the credit card company sought to squash potential competition in its deal with Plaid. And while Visa says it believed it could have beat the lawsuit, the two companies have decided to go their separate ways.

The venture capital community has exploded into a frenzy of speculation over Plaid’s next move. One of the buzziest of buzzy fintechs, after all, was back on the market. Would it seek to go public via merger with another hot topic at the moment, a Special Purpose Acquisition Company (here’s a highly amusing tweet on the topic)? Per reporting from my colleague Jen Wieczner, Plaid is looking to go it alone.

“Moving forward without Visa’s backing, Plaid will likely seek to raise a fresh round of venture capital in the coming months, according to a person close to the company,” she reports

On Twitter, Plaid board member Mark Goldberg too referenced the company’s high ambitions after the breakup. “Exciting news to share today—Plaid is staying independent,” he wrote, adding in what appeared to be a reference to the price at which Visa acquired Plaid: “The opportunity here is $50 billion+, not $5 billion. 🚀”

It’s a good time for fintechs, after all. Ironically, the DoJ’s lawsuit blocking the deal perhaps laid out the most bullish case for Plaid’s future in plain words. It implied that Plaid could launch a direct challenge against Visa. Yes, for the time being, Plaid helps connect financial apps to consumers’ bank accounts, but in the long term, Plaid could disrupt the debit card market and drive down transaction fees. After learning of Plaid’s plans, Visa’s CEO then opined, according to the DoJ: “[Plaid was] clearly, on their own or owned by a competitor going to create some threat to our important U.S. debit business.”

BETTING ON THE RETURN OF TRAVEL: While Visa and Plaid’s merger agreement is dead, fintech startups are still consolidating going into 2021. On Wednesday, payments company Rapyd announced that it raised $300 million in Series D funding led by Coatue. Investors including Spark Capital, Avid Ventures, FJ Labs, and Latitude also joined the round. Some 30% to 40% of those proceeds, says CEO Arik Shtilman, will go toward mergers and acquisitions. 

The fintech space, he says, still needs consolidation. Meanwhile, the pandemic has shifted the market. “The pandemic created opportunities to invest in [for example] companies that were exposed to  travel… or restaurants and stores,” he said. “We believe the physical world will come back. And come back big time.”

VENTURE DEALS

- MX, a Silicon Slopes, Ut.-based data finance company, raised $300 million in a Series C funding. TPG led the round with $150 million and was joined by investors including CapitalG, Geodesic Capital, Greycroft, Cota Capital, Canapi Ventures, Digital Garage, Point72 Ventures, and Pelion Venture Partners.

- Blend, a San Francisco-based startup with a lending paperwork platform, raised $300 million in Series G funding. Coatue and Tiger Global led the round, valuing it at $3.3 billion.

- Webflow, a San Francisco-based maker of a way to launch websites, raised $140 million in Series B funding. Accel and Silversmith led the round and was joined by investors including CapitalG.

- Gett, a London and Israel-based ride-hailing company, raised $115 million. Pelham Capital Investments led the round.

- You & Mr. Jones, a New York-based marketing and branding firm,  raised an additional $60 million in Series B funding. Merian Chrysalis was the investor, valuing it at $1.4 billion. Read more.

- Vdoo, a Tel Aviv-based  product security company, raised $25 million in extended Series B funding. Investors include Qumra Capital and Verizon Ventures.

- Landing, a San Francisco-based long-term rental company, raised $45 million in Series B funding. Foundry Group led the round and was joined by investors including Greycroft and Maveron.

- Earli, a South San Francisco, Calif.-based early cancer detection company, raised $40 million in funding. Khosla Ventures led the round and was joined by investors including Perceptive Advisors, Casdin Capital, Andreessen Horowitz, and Sands Capital.

- Everactive, a Santa Clara, Calif.-based maker of wireless industrial Internet of Things devices, raised $35 million. Fluke Corporation led the round.

- Descript, a San Francisco-based maker of video and audio editing tools, raised $30 million in Series B funding. Spark Capital led the round and was joined by investors including Andreessen Horowitz and Redpoint Ventures. Read more.

- Bryte, a Los Altos, Calif.-based maker of beds, raised $24 million in Series A funding. ARCHina Capital led the round.

- Jumpcode Genomics, a San Diego, Calif.-based genome technology company, raised $21 million in Series B funding. Baird Capital and Arboretum Ventures led the round and were joined by LYZZ Capital

- NeuroFlow, a Philadelphia-based behavioral health tech company, raised $20 millioni n Series B funding. Magellan Health (Nasdaq: MGLN) led the round.

- Molecula, an Austin-based store built for machine-scale analytics and A.I., raised $17.6 million in Series A funding. Drive Capital led the round and was joined by investors including TTV Capital and Tensility.

- CookUnity, a New York-based food subscription company, raised $15.5 million in Series A funding. Fuel Venture Capital led the round.

- Rho Business Banking, a New York-based banking platform, raised $15 million in Series A funding. M13 Ventures led the round and was joined by investors including Torch Capital and Inspired Capital.

- Modern Treasury, a San Francisco-based business payments infrastructure firm, raised $38 million. Altimeter Capital led the round. Read more.

- Nacelle, a Los Angeles-based e-commerce infrastructure startup, raised $18 million in Series A funding. Inovia led the round and was joined by investors including Accomplice, Index Ventures, High Alpha, Silas Capital, and Lerer Hippeau. Read more.

- Snowplow, a London-based data management platform, raised $10 million in Series A2 funding. Atlantic Bridge led the round and was joined by investors including MMC Ventures.

- Gainful, a New York-based protein powder maker, raised $7.5 million. BrandProject and Courtside Ventures led the round and were joined by AF Ventures, Round13 Capital, Barrel Ventures, and the founder of Polaris Sports.

- Slim.ai, a Boxborough, Mass.-based software developer platform, raised $6.6 million in seed funding. Investors include Boldstart Ventures, Decibel Partners, FXP Ventures, and TechAviv Founder Partners. 

- The Modern Milkman, a U.K.-based grocery shopping delivery company, raised £5 million ($6.8 million) from the Environmental Technologies Fund.

- Vesica Technologies, a Los Angeles-based financial data company, raised  $2.1 million in seed funding. Investors included Mercury Digital Assets and Miami International Holdings.

PRIVATE EQUITY

- Yukon Wellness Holdings, backed by American Pacific Group, acquired Eu Natural, a provider of vitamin and mineral nutritional supplement products. Financial terms weren't disclosed.

- Quantic, formed by Arcline Investment Management, acquired TRM Microwave, a maker of microwave component. Financial terms weren't disclosed.

- Ardian invested in Proteor, a Paris-based manufacturer and distributor of prosthetics and orthotics. Financial terms weren't disclosed.

- Aria Growth Partners made a minority investment in Hero Cosmetics, a New York-based skincare company. Financial terms weren't disclosed.

- Audax Private Equity and Linden Capital Partners acquired StatLab Medical Products, a manufacturer and distributor of branded consumable products and reagents in McKinney, Tx. and Mount Vernon, Wash. Financial terms weren't disclosed.

- Bain Capital Double Impact invested in TeachTown, a Woburn, Mass.-based education curriculum software maker. Financial terms weren't disclosed.

- Brentwood Associates invested in MedBridge, a Seattle-based patient engagement and clinical education company. Financial terms weren't disclosed.

- Caprion-HistoGeneX, a portfolio company of Arsenal Capital, acquired Mosaic Laboratories, a California-based company offering histology and immunohistochemistry services to global pharmaceutical companies. Financial terms weren't disclosed.

- Clearview Capital recapitalized MBI Industrial Medicine, a Phoenix, Az.-based provider of occupational injury care services. Financial terms weren't disclosed.

- Kith Kitchens, a portfolio company of Pfingsten,acquired Mouser Custom Cabinetry, a Elizabethtown, Ky.-based  maker of kitchen and bath cabinetry. Financial terms weren't disclosed.

- Loftware, a portfolio company of Riverside Partners, merged with NiceLabel, a Slovenia-based developer of label design and printing software. Financial terms weren't disclosed.

- Mercer Global Advisors, backed by Oak Hill Capital and Genstar Capital, acquired Rowland Carmichael Advisors, a Scottsdale, Ar.-based financial advisory company. Financial terms weren't disclosed.

- O2 Investment Partners invested in Flip Electronics, a Roswell, Ga.-based distributor of electronic components. Financial terms weren't disclosed. 

- Power Digital, backed by Periscope Equity, acquired Social Method, a marketing agency. Financial terms weren't disclosed.

- Silver Lake is in advanced talks to acquire a minority stake in the commercial activities of New Zealand Rugby, per Reuters. Read more.

- Solaris Health, backed by Lee Equity, combined with The Centers for Advanced Urology, a Philadelphia-based urological services provider. Financial terms weren't disclosed.

- Serent Capital invested in Book4Time, a Canadian software maker for the hospitality, spa, and wellness industry. Financial terms weren't disclosed.

- Sterimed, backed by Sagard, says it is in exclusive negotiations with Amcor to acquire Amcor’s European Hospital Packaging business comprising the manufacturing and sales facility in Coulommiers, France and sales offices in Bromeda, Germany, and Pergut, Spain. Financial terms weren't disclosed.

- Trilantic North America invested in Orva, a New York-based maker of an e-commerce platform specializing in the sale of footwear, apparel, accessories and home products. Financial terms weren't disclosed.

- Vance Street Capital acquired Excel Scientific, a Victorville, Calif.-based maker of microplate sealing films and foils used by life science research, university, and testing laboratories. Financial terms weren't disclosed.

- TPG’s The Rise Fund acquired a majority stake in Element Markets, a Houston-based marketer of renewable natural gas. Financial terms weren't disclosed.

EXITS

- Golden Gate Capital is considering a sale of Mavis Express Tire, Services, an auto service chain, in a deal that could value the latter at as much as $6 billion, per Bloomberg citing sources. Read more.

- Senior management at Associated Supermarket Group, a Port Washington, N.Y.-based company servicing grocery stores, acquired the business from AUA Private Equity Partners. Financial terms weren't disclosed.

- Investment Metrics, backed by Resurgens Technology Partners, acquired Style Analytics, a London and Boston-based investment and ESG analysis company, from Horizon Capital. Financial terms weren't disclosed. 

- Incline Equity Partners acquired BBG, a Dallas-based provider of commercial real estate appraisals, from  Silver Oak Services Partners. Financial terms weren't disclosed.

- Net Health, backed by Level Equity and the Carlyle Group, acquired PointRight, a Cambridge, Mass.-based healthcare analytics company. PointRight is backed by Accel-KKR and EDG Partners, per PitchBook. Financial terms weren't disclosed.

- Planview agreed to acquire Clarizen, a Tel Aviv, Israel and San Mateo, Calif.--based enterprise software company, from K1 Investment Management. Financial terms weren't disclosed.

- Valeo Foods acquired Schluckwerder, a German chocolate maker from Novum Capital. Financial terms weren't disclosed.

OTHER

- NCR offered to acquire Cardtronics (Nasdaq: CATM), an ATM operator, for over $1.7 billion. 

- Byju’s agreed to acquire Aakash Educational Services, an India-based in-person test prep company, for $1 billion, per Bloomberg. Read more.

- Alimentation Couche-Tard is considering an acquisition of Carrefour, a French grocer, per Bloomberg. Read more.

IPOs

- Knowlton Development Corp, a Canadian maker of beauty products, is preparing to go public at an over $5 billion valuation, per Reuters citing sources.  Cornell Capital backs the firm. Read more.

- Moonpig Group, a U.K.-based greeting cards company, is preparing for an IPO that could value it at over $1.4 billion, per Bloomberg. Read more.

- Aadhar Housing Finance, an Indian mortgage provider, is planning to file for an IPO this year. Blackstone Group backs the firm. Read more.

- Mytheresa.com, a Germany-based luxury online retailer, plans to raise as much as $282 million in a U.S. IPO. Ares Private Equity and CPPIB back the firm. 

SPACS

- Talkspace, a New York-based online therapy app, will go public via merger with Hudson Executive Investment Corp., SPAC. The deal would value it at around $1.4 billion. Investors including Federated Hermes Kaufmann Funds, Jennison Associates, Woodline Partners, and Deerfield have also committed $300 million to a SPAC.

- Northern Genesis Acquisition II, a SPAC targeting , raised $360 million. Read more.

- Mason Industrial Technology, a SPAC formed by Mason Capital, filed to raise $400 million. Read more.

- TLG Acquisition One, a SPAC formed by The Lawrie Group, filed to raise up to $300 million. Read more.

F+FS

- Capital Constellation, managed by Wafra, took a minority stake in Avista Capital Partners, a New York-based private equity firm.

- Define Ventures, a healthcare-focused venture capital firm, raised $200 million for its second fund. Fund II. 

PEOPLE

- Thoma Bravo, a San Francisco-based private equity investment firm, promoted A.J. Rohde to senior partner.

- HKW, an Indianapolis-based private equity firm, promoted Tom Shaw to principal.