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ACQ2: From Almost Sold to Market Leader | Plaid & Zach Perret
@ Acquired
05/27/25
Takeaways
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Zach Perret
05/27/25
@ Acquired
Despite the acquisition announcement, the deal was ultimately terminated due to an antitrust lawsuit from the US Department of Justice, which claimed that the acquisition would expand Visa's monopoly.
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Zach Perret
05/27/25
@ Acquired
In January 2020, we announced that Visa was acquiring Plaid for over $5 billion, which was the result of months of negotiations and interest from Visa as an investor.
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Zach Perret
05/27/25
@ Acquired
The emotional response from employees during the acquisition announcement was intense, as many had invested years into the company and had their identities tied to its success.
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Zach Perret
05/27/25
@ Acquired
After the acquisition fell through, Plaid's business continued to grow significantly, leading to a valuation of $13 billion in a subsequent fundraising round.
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Zach Perret
05/27/25
@ Acquired
We built Plaid to create a new financial infrastructure that allows consumers to link their bank accounts to digital applications, addressing the outdated banking system that required in-person visits for most transactions.
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Zach Perret
05/27/25
@ Acquired
Initially, we used screen scraping to collect financial data from banks, as many did not have APIs in place, but we aimed to partner with banks to create a more efficient system.
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Zach Perret
05/27/25
@ Acquired
As we evolved, we expanded our product offerings to include credit verification and bank payment infrastructure, allowing for seamless financial transactions and identity verification.
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Zach Perret
05/27/25
@ Acquired
Despite the challenges, we maintained a focus on growth and innovation, leveraging our data to adapt to changing market conditions and consumer behaviors.
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Zach Perret
05/27/25
@ Acquired
The fintech boom was characterized by rapid growth and innovation, but as interest rates rose in 2022, we faced challenges as investment and lending markets froze, impacting our business.
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Zach Perret
05/27/25
@ Acquired
Our business model generates revenue in three ways: per user signup fees, per payment fees, and a stable per user per month fee for different products.
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Zach Perret
05/27/25
@ Acquired
During the COVID-19 pandemic, while new user signups dropped significantly, our existing revenue streams remained stable, leading to slower revenue growth rather than declines.
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Zach Perret
05/27/25
@ Acquired
In the second half of 2022 and the first half of 2023, financial services startups experienced slower growth, but we began to see accelerating growth again in the second half of 2023 and into 2024.
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Zach Perret
05/27/25
@ Acquired
We emerged from the recent interest rate cycle stronger, launching major new products and replatforming our strategy, which has led to great business performance this year.
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Zach Perret
05/27/25
@ Acquired
Our strategy has always been to build the API for bank account linking, but we also aim to leverage the data we collect to create valuable analytics products that can transform financial services.
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Zach Perret
05/27/25
@ Acquired
Raising a large funding round in 2021 allowed us to rapidly expand our engineering team and replatform our data backend, enabling us to shift towards becoming an analytics business.
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Zach Perret
05/27/25
@ Acquired
We've developed three major new product areas: anti-fraud tools that analyze user patterns across apps, a real-time credit system that uses real-time data to assess credit risk, and improved bank payment analytics.
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Zach Perret
05/27/25
@ Acquired
More than half of Americans with bank accounts have linked them through Plaid, giving us a unique perspective on consumer finance data that no other financial institution has.
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Zach Perret
05/27/25
@ Acquired
We aim to build a brand that resonates with developers, financial institutions, and consumers, focusing on trust and clarity, even though our user experience is often embedded and not directly visible to consumers.
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Zach Perret
05/27/25
@ Acquired
The shift in consumer perception from viewing fintech apps as risky to seeing them as safe has been significant, as evidenced by my mom's trust in a product powered by Plaid.
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Zach Perret
05/27/25
@ Acquired
In today's software development environment, the quality of decisions made by developers is becoming more important than the sheer volume of work done, as tools increasingly handle repetitive tasks.