Plaid IPO Review

Plaid IPO Review

Initial public offerings or IPOs are known as a great way for investors to make a big profit in a relatively short time. On average, they can bring investors 40% returns in the first 3 months. Once the initial funding stages are out of the way, IPOs can be a great way for companies to gain exposure to the open market, help the company grow by attracting more capital and improve liquidity. Keep reading to find out key info such as, ‘is Plaid publicly traded?’, and the potential Plaid IPO 2022.

Plaid History

It’s not every day someone thinks of an idea for a unified banking API, which is why it’s not every day a company draws a venture capital valuation of $13.4 billion. For Zach Perret and William Hockey, it was that day back in 2013. The two were initially planning on building a financial management product software that included budgeting and bookkeeping. When confronted with difficulties in connecting their bank accounts required for the tool they built, they decided their original idea was too simple and needed more of a challenge. Henceforth, they decided to tackle the universal issue of bank account connections. 

The Fintech company capitalized on the fact that many social payment platforms and digital currency exchanges require bank connections which have an outdated linking method. Plaid took a consumer-focused approach and made life easier for users of these various platforms by providing banking services, so that apps like Venmo and Chime didn't have to develop an entire infrastructure themselves. Instead, users can simply login with their bank account credentials through Plaid. The company now claims to integrate with more than 11,000 banks and be connected to more than 200 million consumer accounts. 

Plaid has raised over $730 million from 7 rounds of funding with the latest being a series D round on August 25, 2021, where it received its $13.4 billion valuation. Back in early 2020, Plaid was nearly acquired by Visa for $5 billion, but luckily for Plaid the deal was blocked by antitrust regulators. In little over a year, the Fintech startup was able to almost triple its valuation, with investor backing from names such as Altimeter Capital, J.P. Morgan, Goldman Sachs Investment Partners, and many more. The current valuation of the company is unknown, but it is likely not at the $13.4 billion sticker price slapped on it back in August of 2021. It could be slightly higher or lower, likely the latter with interest rates hovering around 4% currently. Regardless, with such a large valuation, there is significant anticipation of the potential Plaid IPO date.

Plaid’s Public Listing Key Data and IPO Date

Plaid IPO Date: TBA
Ticker: N/A
Exchange: Nasdaq
IPO stock price: N/A
Valuation at IPO: $10-15 billion (estimated)
Market cap: N/A
CEO: Zach Perret
Category: Technology

No matter how much you Google, ‘When is the Plaid IPO date?’, nothing will pop up. There were rumors of the IPO coming in 2022, but as the year ends it is unlikely this will come to fruition. CEO Zach Perret has stated that he is interested in setting a Plaid stock IPO date, but does not like the current market conditions. When the Plaid stock IPO does occur, it will likely be listed on the NASDAQ, which is typical for tech firms. The real question right now besides, ‘When is Plaid going public?’, is when inflation will be tamed and interest rates will fall back to a tolerable level, allowing IPO activity to pick back up. With the Federal Funds rate expected to continue to bounce around the 4% range though 2024, it is possible that Plaid going public may not occur for another year or longer. 

Another major deterrent of Plaid going public is how well it has done in its capital raises. With its most recent capital raise hauling in over $400 million, the company continues to have the cash on hand to continue expanding without having to give up significant ownership through an IPO. Right now, there’s likely a couple things racing through Zach Perret’s mind when IPO discussions come up. First off, the company in all honesty probably loves the secrecy it gets from being a private company. This allows the “work in silence” vibe for Plaid, keeping competitors on their toes as they don’t know what the Fintech company will release next. Additionally, the firm may continue to leverage the hype and anticipation surrounding a Plaid IPO, allowing the valuation to keep skyrocketing, giving Perret & friends the payday of a lifetime. Regardless of when it happens, the IPO will be one for the books. Hopefully we get the opportunity to hear of the Plaid IPO date and price sooner than later. 

So What About Investing Now?

Until we hear of a Plaid IPO price, there is little the average retail investor can do. Unless you have tens of millions sitting around, you likely aren’t getting a stab at investing pre-IPO, but let’s imagine what if. 

Ever since 2018 when Plaid reached unicorn status during its Series C funding round, the company has continued to gain momentum. Even non-believers, such as J.P. Morgan CEO Jamie Dimon, have been turned into believers. The big-bank head honcho initially criticized Plaid in early 2021, stating the company was full of “people who improperly use data that’s been given to them”. Shortly after, in Plaid’s August 2021 capital raise, Dimon must have had second thoughts, as J.P. Morgan invested in the company even at its valuation of $13.4 billion. Must have gotten a little FOMO. This move showed that traditional financial institutions see the wave of change coming and don’t want to miss the party, no matter how late they show up.

Despite how great Plaid is, there are still some uncertainties surrounding the company. The main deterrent is its rival Stripe, who’s most recent venture capital valuation came in at $95 billion. A year ago, this wouldn’t be much of a topic to discuss, as the two companies were known to be acquaintances and work together on certain projects. This was until in mid 2022 when Stripe announced it would be launching Financial Connections, its own API for connecting directly to consumer bank accounts. This caused some bad blood between the two Fintech companies and has now taken away Plaid’s title as the sole pioneer in the world of unified banking. Plaid does have years of experience and code over Stripe, but Stripe is a much larger company and can utilize economies of scale more effectively. Nevertheless, Plaid is certainly a company of the future and will always have market share in the Fintech space. 

FAQ

Is Plaid a public company?

Plaid is currently a private company founded by Zach Perret and William Hockey back in 2013. The CEO has discussed intentions of going public, but there is still no set date on when the event will occur. 

How much is Plaid worth?

Plaid was valued at $13.4 billion during its most recent capital raise, solidifying the company as a “unicorn” in the tech space. 

Who owns Plaid? 

Plaid is owned by various investment firms, but the largest owners of the company are founders Zach Perret and William Hockey, who are estimated to own 13% and 12%, respectively. 

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