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BFD Expert Voices - Private Credit

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Plaid saw its valuation plunge by more than half in a $575 million secondary sale that values the company at $6.1 billion.

Why it matters: Late-stage fintechs clinging to 2021 valuations are being forced to reset expectations before their next round or IPO.

Context: The secondary sale values the data connectivity fintech well below the $13.4 billion valuation it received in a 2021 funding round.

And it's only slightly better than the $5.3 billion pricetag Visa had agreed to pay for the startup in early 2020, before the deal was abandoned in 2021.

Zoom in: The share sale was led by new investors Franklin Templeton, Fidelity, and BlackRock and includes participation from existing investors NEA and Ribbit Capital.

What they're saying: "We've recalibrated our valuation to set a more sustainable and realistic floor, given we're in a drastically different funding environment compared to our last raise in 2021," Plaid chief strategy officer Jason Pate told Axios.

He pointed to a 60%–90% decline in public fintech valuations over the same period, calling Plaid's repricing "a reflection of broader market trends."

State of play: Other fintechs that raised big rounds in the ZIRP era have been forced to accept lower valuations.

Klarna, which hit a $45.6 billion valuation in 2021, filed to go public in a listing expected to value it at $15 billion to $20 billion.

eToro, which attempted to go public in a 2021 SPAC merger valued at $10.4 billion, filed for IPO and is expected to list at a $5 billion valuation.

Experts believe Circle, which was once valued at $9 billion in is own failed SPAC attempt, will also be valued at around $5 billion in its IPO listing.

Follow the money: Plaid plans to use the proceeds to convert expiring RSUs into common shares and fund an employee tender offer.

Pate says Plaid has no plans to raise additional capital before an IPO, pointing to strong margins and record revenue as signs the business can stand on its own.

By the numbers: Plaid claims revenue increased 25% year over year in 2024, driven primarily by customer adoption of its newer, non-core products.

Those products now account for 20% of ARR today, with anti-fraud revenue up 400% and payments revenue up 250% from the prior year.

It also saw 70% year-over-year growth in its credit reporting segment, but that product was only officially launched halfway through last year.

"While our valuation is lower than 2021, Plaid is a much stronger business today — with deeper product lines, broader customer segments, and a more durable foundation for the future," Pate says.

Between the lines: As for Plaid's eventual IPO plans, Pate says the company doesn't have a timeline to share right now.

"While an IPO is an eventual milestone that we are tracking towards, timing is going to be dependent on a number of factors: market conditions, the regulatory environment, the overall market opportunity," he added.

Plaid's valuation falls to $6.1B in $575M secondary sale

Fintechs clinging to 2021 valuations face a new reality

Illustration of a calculator with downward arrows flashing on the screen.

Illustration of person holding a smartphone with a downward trending line graph

Plaid saw its valuation plunge by more than half in a $575 million secondary sale that values the company at $6.1 billion.Why it matters: Late-stage fintechs clinging to 2021 valuations are being forced to reset expectations before their next round or IPO.

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Plaid's valuation falls to $6.1B in $575M secondary sale

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