American Fintech Plaid Raises $575 Million, Reaching A $6.1 Billion Valuation

The American fintech company Plaid announced on Thursday that it has raised approximately $575 million in a recent funding round, bringing its valuation to $6.1 billion—a significant drop from its previous $13.4 billion valuation in 2021. The new investment will be used to cover tax obligations and provide liquidity for employees.

According to the announcement shared by Zach Perret, co-founder and CEO of Plaid, on the website, the funding round was led by Franklin Templeton among other investors such as Fidelity Management, NEA, and Ribbit Capital.

“We are excited for the years ahead,” wrote Perret. “Plaid has evolved from a business solely focused on bank linking, into a suite of data analytics products that are essential to financial services and adjacent markets.”

The CEO assured that they’ve experienced a “substantial growth” in 2024 and that now 1 in 2 people in the United States have used Plaid.

In an interview with CNBC, Perret explained that the price drop in its valuation has to do with the current market conditions. He added that in 2021, when the company surpassed the $13 billion valuation, the market was extremely favorable for the industry, but now, four years laters, the environment has significantly changed.

“The profitability of business has gotten quite a lot better, and yet we are impacted by market multiples, as many companies are,” said Perret.

In the future, Perret confirmed that they expect to go public—and this might be the company’s last private fundraiser—but that they are not ready yet for an initial public offering (IPO) yet.

“An IPO is absolutely on our path for the coming years. We haven’t assigned a specific timeline to it,” explained Perret. “We still have a lot of internal work to do. We’re not ready, which is why we didn’t consider it right now.”

The new fundings will allow employees to cash out so that they can have liquidity.

“The proceeds of this round will be used to address employee tax withholding obligations related to the conversion of expiring RSUs to shares, and to offer some liquidity to our current team,” wrote Perret on the website.

Other fintech companies have raised funding rounds in recent months. The French investment firm Karmen secured €9 million in January to expand its services, while the health fintech PayZen raised $232 million a couple of months ago.