San Francisco-based FinTech Plaid, co-founded by Zach Perret and William Hockey, is raising $600m in new funding and will reportedly be valued at as much as $15bn, according to The Information.
With the new round, which is being led by Altimeter Capital, the company’s investors are assigning it a value of between $10bn and $15bn – a figure much higher compared to the $5.3bn Visa planned to pay in a deal last January.
The potential deal with Visa was scrapped in January this year after the US Justice Department sued to stop the merger, citing that the combined company would become a monopoly in the online debit-card market.
These developments have driven Plaid’s worth and lured many investors to buy shares in the company. More recently, in March this year, the firm launched a payroll verification product dubbed Plaid Income to make it easier for people to prove their income to secure loans, mortgages and leases.
This would also enable lenders to retrieve a consumer’s income data “straight from the source,” allowing lenders to make “better-informed risk decisions, issue pre-approvals or approvals faster, and allocate fewer resources to manually reviewing documents,” the company said.
The company, which works with more than 11,000 banks and financial institutions, aims to have 75% of its traffic dedicated to APIs by the end of 2021, it said at the start of the year.
Indeed, the FinTech sector has witnessed a slew of companies gaining the decacorn status. Digital bank Chime is planning an IPO giving it a valuation of more than $30bn.
Robinhood which is planning its public debut this year chose Nasdaq as its listing exchange. Stripe’s private investors assigned it a value of $95bn after a recent $600m funding round.
Brokerage firm eToro revealed a $10bn merger with a SPAC, causing the blank-check company’s stock to surge.
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