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Is Plaid destined to go it alone?

April 7, 2021, 2:51 PM UTC

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The numbers are in: The Plaid-Visa breakup has handsomely paid off for Plaid’s investors.

On Wednesday, the startup founded in 2012 announced a funding round that a source says values the company at about $13.4 billion, more than double the $5.3 billion price tag Visa placed on the company roughly a year earlier.

The $425 million Series D round of funding, led by Altimeter Capital, is one that allows the company to stay private longer while taking advantage of the surge in online banking and e-commerce. Plaid has already gotten a steroid shot from the latest increase in fortunes for fintechs. While the company declined to give revenue figures for the last year, it says its customer base grew by 60% and has added Microsoft and Google as clients.

“This is a year and period of massive speed for this industry,” Plaid CEO Zach Perret told Term Sheet this Tuesday. “We need to ride the opportunity that has presented itself.”

The deal with Visa, called off in January amid a Department of Justice antitrust probe, would have undoubtedly changed the DNA of the company. But Perret’s vision for Plaid is remarkably consistent to a year ago. Every company is a fintech, he says. 

And as part of that thesis, the company has recently expanded into a buzzy area: payroll verification. Yes, it sounds dull, and if done right, consumers won’t notice Plaid’s hand in connecting payroll information to a lender or landlord. But investors are betting fintechs, banks, and employers are willing to lavish ample sums upon accessing that information.

I can’t help but wonder if Plaid plans to eventually go public. To an extent, it seems as if the universe is pushing it toward one instead of a merger. In 2018, Jack Dorsey’s Square held talks to acquire the company for about $1 billion. A deal never materialized, but the ensuing VC-fueled bidding war for a stake in the company pushed Plaid’s valuation far beyond the unicorn mark to about $2.7 billion. Years later, soaring fintech valuations and that Department of Justice probe into the Visa and Plaid deal put an end to that engagement.

Is the company destined to go it alone? Plaid’s decision to choose a lead investor in Altimeter, a firm that has made its way into many startup deals by marketing its public-market knowhow, certainly seems to point in that direction.

“I fully expect that Plaid at some point in the future will be a public company and I think we’ll be excellent partners whenever and however they choose to crossover to the public markets,” says Altimeter CEO Brad Gerstner to Term Sheet.

As for the when—that’s hazier.

“A public offering and eventual move to the public market is one we’ve certainly thought about in the long future, but it’s not on the near horizon,” Perret told me, saying the company is focused at the moment on capturing growth.

Altimeter was joined by fellow new investors Silver Lake and Ribbit Capital. A roster of existing investors including Andreessen Horowitz, Index Ventures, Kleiner Perkins, New Enterprise Associates, Spark Capital, and Thrive Capital also added to the round.

C3PO—uh, C3P1: The last 12 hours have been quite the news cycle for Clubhouse, Canva, Coinbase, and, in a break from the Cs, Patreon. I’ll keep it short and sweet.

  • CANVA: Australia-based graphic design software startup Canva is now valued at $15 billion after a $71 million round of funding. What struck me about this raise: It appears to be incredibly non-dilutive financing to employees, founders, and early investors (the company was last valued at about $6 billion in 2020)—signaling that the company had plenty of bargaining power on its side, and maybe didn’t actually need the funding in the first place. The company is profitable, per my colleague Robert Hackett, and is projected to grow revenue by 130% to $500 million in 2021. Read more.
  • CLUBHOUSE: Yesterday, this newsletter covered Clubhouse’s prioritization of growth over monetization. It may well have more funding to continue that route. Bloomberg reports that the company, one year since its launch, is in talks to raise at a $4 billion valuation. Read more
  • COINBASE: Ahead of a direct listing slated for next week, the cryptocurrency exchange revealed it had one heck of a start to 2021. It had surpassed its revenues from 2020 in just the first three months of this year alone, with revenue of $1.8 billion in the first quarter of the year compared to $1.3 billion in all of last year. That could set it up for a very positive turn in public markets, despite the recent shakiness in the market for tech stocks.
  • PATREON: The idea of the “creator economy” has taken off lately. Patreon, a platform for individuals and artists to create their own subscription service, is part of the boom. The company raised $155 million in Series F funding, led by Tiger Global Management, valuing the business at $4 billion. Read more.

Lucinda Shen
Twitter: @shenlucinda


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