Yesterday, we spoke with Plaid CEO and co-founder Zach Perret after news broke that Visa no longer plans to buy his company for $5.3 billion.
The deal was heralded in early 2020 as a sign of the growing importance of fintech startups. Then it failed to close, eventually running into a lawsuit from the U.S. Department of Justice. A few months later, the acquisition was dropped.
Sentiment in the market changed since the transaction was announced. As TechCrunch reported yesterday, there’s a good deal of optimism to be found amongst investors and others that Plaid will eventually be worth more than the price at which the Visa deal valued it.
What follows is a summary of our conversation with Perret, digging into a number of topics we felt most were pressing in the wake of Plaid’s unshackling.
Now what?
First and upfront: It does not appear that Plaid is racing to the public markets via a blank-check company, or SPAC, a question several readers asked on Twitter. Our impression from our chat regarding near-term liquidity via the public markets is that those with their hopes up have them up a few years too early.
TechCrunch asked Perret how it feels to be free from his erstwhile corporate boss.
He said that the last few years have been a “roller coaster,” adding that when they made the choice to sell, it made sense at the time from mission and delivery perspectives — Visa wanted to accomplish similar things and could give his company access to a wide network of potential customers.
“Fast-forward” to today, Perret continued, and Plaid’s decision to go it alone is “once again” the right choice. A different choice, he admitted, but Perret said he wanted it to be clear that the deal had felt right when it happened, and that this new direction a year later feels similarly.
How is that possible? 2020 happened. We asked Perret about Plaid’s growth last year, a period in which COVID-19 fractured traditional banking, forcing many into the world of fintech for the first time.
Plaid’s CEO declined to share “specific numbers,” but did provide TechCrunch with a few hints. The pandemic triggered a “sea change” in consumer behavior, Perret said, bringing demographics of users online that his company had not anticipated serving. People over the age of 50, basically.
Perret also said he expects the consumer move to fintech to stick, meaning that the changes we saw in the finance product market last year should persist into 2021; that’s good news for investing and banking fintech startups, we reckon.
On that front, the CEO told TechCrunch that the positive impacts of COVID-19 were not uniform; consumer lending had its ups and downs, he said, while other categories had seen even better years. Perret said there’s consensus in fintech that last year’s growth and activity was “inconsistent,” even if on net it was “very positive.”
TechCrunch also asked if Plaid had to slow down much during its time as a Visa-vassal-in-waiting. Per Perret, his company anticipated having lots of flexibility on its product choices after the deal was expected to close. This meant that the pre-closing period was not as stifling as we might have anticipated.
The Plaid co-founder also said he appreciates the “clarity” his company has today and hinted at forthcoming products, though we failed to get more out of him than that.
How did the news of the acquisition falling through land amongst the company’s employees? He said that his honest answer was that we should ask him in a week, as the news had just broken.
That’s fair. TechCrunch guesses that if Plaid wanted to raise a huge amount of money and provide some structured secondary for employees who had been anticipating a huge payout from the Visa deal, that it would be more than possible.
After all, Plaid was said to be a great business heading into 2020. And now with 2021 underway, the market only looks better for the startup.
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