With Plaid-Visa merger off, Plaid eyes client growth prospects

On Tuesday, Jan. 12, Visa and Plaid decided to terminate a merger agreement inked nearly a year ago that would allow Visa to acquire the data aggregator for $5.3B.

Why should we care?
Visa acknowledged that the acquisition would have delivered significant benefits for consumers, developers, and institutions, but protracted litigation would be too big of a burden to overcome. Plaid echoed these views in its commentary, noting that it would continue to focus on helping companies deliver digital financial products. Considering Plaid reportedly saw 60% customer growth in 2020 – bringing it to more than 4,000 clients – the company has significant runway to grow. DOJ scrutiny on the acquisition deal that was in the works, argues TechCrunch’s Alex Wilhelm, “doesn’t bode well” for other startups eyeing an exit to an incumbent. Among the venture capitalists queried by the publication, some expressed optimism about Plaid’s opportunities without Visa. Amy Cheetham of Costanoa Ventures said the result was good for the company and for talent acquisition, potentially unlocking “Stripe-like potential” with the continued growth of the fintech infrastructure space. For its part, Visa, in a statement, said it will continue to work with Plaid as a partner, along its path to advance three growth pillars: consumer payments, new flows, and value-added services.