Plaid, which connects bank accounts to financial applications, sells approximately $575 million worth of common stock at a money valuation of $6.1 billion.
The rating is less than half of the $13.4 billion valued when San Francisco-based Plaid raised a $425 million Series D in April 2021 round led by Altimeter Capital. A spokesperson confirmed the decline, saying it “simply reflects multiple contractions across the market.”
In fact, it led to a low rating of many startups that last rose at the top of the high cycle in 2021.
Still, the new rating for Plaid is about 15% higher than the $5.3 billion visa pays the company before its acquisition agreement collapsed in January 2021 due to regulatory concerns.
Plaid will not be released in 2025, but according to a spokesman, it is a milestone in which the company continues to “track.” In October 2023, Plaid became the new Chief Financial Officer, named former Expedia executive Eric Hart. The fact that it appears to be focusing on the IPO – there is no timeline, but it has attracted attention.
Today, the company claims it is “appropriately capitalized.”
“Plaid’s business is in a great position and we are optimistic about the opportunities ahead,” the spokesman said.
Franklin Templeton led the “oversubscribe” raises, including existing investors NEA and libbit capital, as well as participation from new backers Fidelity Management and Research, BlackRock and others. Plaid characterizes the transaction as “not Series E,” rather a sale of common stock, including companies that directly issue new shares to raise capital. This is different from secondary stock sales that occurs when existing shareholders sell shares to other investors without the existing shareholders receiving new capital.
Round revenue is used to address employee tax withholding obligations related to the conversion of RSU expiration (restricted stock units) into stock and to provide some liquidity to the current team via employee bid offers.
The company did not break down exactly how capital is progressing towards each initiative, but a spokesman told TechCrunch that the majority of secondary sales are heading for RSU conversion, which will expire in the coming years.
“We raised capital to cover the RSU expiration issue, but the employees have a small bid, but that’s not the entire round,” the spokesman said.
Restricted stock units are typically issued to employees through a vesting schedule after achieving required performance milestones or staying with an employer for a specific period of time.
The pay raise comes shortly after what Pellet described as a “recorded year in revenue, a return to positive operating margins, meaningful increases in companies and markets.”
He did not provide tough revenue figures, saying revenues rose above 25% in 2024 and the company is approaching “sustainable profitability.” In a shareholder’s letter viewed by TechCrunch, Perret wrote in 2024 that the new product, representing more than 20% of Plaid’s ARR, was “compounded at 93% per year.”
Founded in 2012, Plaid started as a company that linked consumer bank accounts to financial applications, but has since been gradually offered to include lending, identity verification, credit reporting, counter-burning and payments.
Being a multi-product company has begun to provide services beyond traditional fintech customers. President Jen Taylor told TechCrunch last June that growth in businesses and traditional financial institutions is “starting to surpass the rest of the business.”
Overall, Plaid saw a “big rise in the number of companies” serving in 2024, Perret wrote in a shareholder’s letter. The company considers City, Robinhood, H&R Block, Invitation Holmes, GoFundMe, Zillow and Rocket as “major customers.”
The pellet writes: “Our goal is to build software that makes the financial system better for everyone. Our products are bedrock where many of the most well-known financial brands are built.
Plaid has raised approximately $1.3 billion in funding over its lifetime. Currently, we have 1,200 employees in the US, Canada, the UK and the EU.
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