Earlier this week Plaid, the fintech scale-up that has raised $310 million from the early investors of Facebook, Skype and Slack to connect bank accounts to fintech applications, announced that it had decided to terminate its pending acquisition by Visa, and will instead remain an independent company.
Keith Gross, Head of UK, Plaid
Commenting on the latest news, a post on the company’s blog said, “Since founding Plaid eight years ago, we have been maniacally focused on expanding access and improving financial outcomes for consumers, developers, and financial institutions – and the intent of joining Visa was to accelerate that work.
“Unfortunately, the pace of a multi-year regulatory review is not compatible with the fast-moving realities of a startup – and delaying close another year or more is not in the best interest of our customers, the financial system, or consumers themselves.”
Keith Grose is the Head of UK for Plaid. He joined the company from Google, where he scaled hardware efforts with Pixel phones and Google Home speakers, and helped run business strategy for some of the company’s new technology bets, including Google Pay and virtual reality. Here he talks to The Fintech Times about why the acquisition by Visa fell through.
Thanks for chatting to us Keith, can you explain when did you make this decision?
While we can’t go into detail about timelines, this was a mutual decision after much discussion between the executive teams at Visa and Plaid. We’re more interested in the opportunities 2021 offers than looking backwards.
Previous to the news, what were your key plans and aspirations from the merger?
While our trajectory in terms of ownership has changed, this hasn’t affected Plaid’s growth plans or aspirations. We’re always working to provide the best platform and services for innovators to unlock financial freedom for everyone — and we’ll continue to do so.
VISA remains a key investor and supportive partner and we look forward to what the future holds. We’re not quite ready to share specifics, but we’ll continue to work together on strategic products and initiatives.
Where does this leave Plaid now?
It actually doesn’t change our UK and European strategy or presence at all. If anything, it makes it a more important and key factor in what we’re focussing on at Plaid. 2020 was one of the best years yet for Plaid – We grew our client base significantly, forging new relationships across many verticals that give people and businesses many convenient, simple ways to manage their finances.
We’re going back to our roots as a high-growth, innovative start-up. In 2021 there is a huge opportunity to seize on a tangible demand for faster, more efficient payments powered by open finance. For Plaid as a company, our growth tracks with the massive surge in fintech adoption that took place in 2020: Our customer base grew 60% in 2020, to more than 4,000 companies using our APIs, including companies like Microsoft and PayPal. We also connected “hundreds of new banks” to our network. Plus, we grew our team by 45% last year and plan to grow by another 50% this year
Strategically, will you now look to change direction/grow in different ways?
In the UK and Europe, Covid most impacted payments. We entered the market with our AIS license, similar to our strategy in North America. We gained traction, but in working with customers and partners quickly realized the biggest area of demand for Plaid in Europe is around payments.
In February we launched Payment Initiation, a suite of products which enable seamless and cost-effective payments via open banking rails, before the pandemic really hit. Once the pandemic took hold, it became clear that this was a massive emerging opportunity.
Plaid’s Payment initiation makes it faster and easier to set up bank payments for both businesses and individuals, while reducing fees and minimising the risk of fraud. We’re building out this new functionality for payment initiation, adding features and services that make bank-to-bank payments as easy and as cost-efficient as possible. Europe is a market ripe for innovation in this area with much less saturation of cards as compared to North America.
In addition to this, we’re well-positioned to service customers across crypto, savings and investment, which we’re going to be building on even more moving forward. We’re already working with Gemini, Coinbase on the Crypto side, Cleo and Curve on the PFM/Savings side.
How are investors taking the news?
Our investors are excited about what the future holds for Plaid – the reaction to the news has been extremely positive, particularly on twitter (e.g. Andreessen Horowitz
). Business Insider collated the positive reactions of our investors here
How do you feel about continuing as an independent company?
It does feel like we’re back in startup mode. We’ve got plenty of interesting stuff in the pipeline – we’re bringing on new customers, especially those outside of the walls of “fintech”, as we’ve already done with Microsoft in the US. We’ll have a few more interesting announcements to make soon – some of which may come as a surprise.