SAN FRANCISCO – Visa Inc. (NYSE: V) announced that it has agreed to buy privately held software startup Plaid Inc. for a record USD $5.3 Billion. Plaid is a financial data aggregation company that connects end users bank data to various online and mobile platforms, such as Venmo, Acorns and Chime.
“Plaid is a leader in the fast-growing fintech world,” Visa Chairman and CEO Al Kelly said in Monday’s statement.
Consumers rely on Plaid’s apps and services to help plan their spending, increase their savings and monitor their investments. The company claims that its system is used by 1 in 4 users with a U.S. bank account.
This acquisition represents Visa’s growth strategy of gaining entry into new businesses and complementary enhancements to Visa’s existing business.
The transaction also highlights traditional financial firms’ attempt at making inroads into the digital and cashless financial services space; through the acquisition of strong fintech players. It was revealed that both Visa and MasterCard were both investors in the $250 million Series C round that was announced in December 2018. Analysts are now studying similar fintech companies, as well as some of Paid’s competitors, for similar acquisitions.
