This represents less than half of what it was worth during its last fundraising round in 2021. The decline reflects several challenges in the fintech sector, where higher interest rates have led investors to be more selective.
Plaid, known for its role in enabling consumers to connect their bank accounts with digital applications, attracted new investors such as BlackRock, Fidelity, and Franklin Templeton in the latest financing round. However, the valuation is a significant reduction from the USD 13 billion it represented at the height of the fintech boom, when low interest rates encouraged aggressive investment in high-growth start-ups.
A representative from Plaid acknowledged that the previous funding round took place during a peak in market valuations and stated that the lower valuation aligns with the current investment climate. While technology sector valuations have compressed significantly, they emphasised that the company’s financial fundamentals, including revenue, have strengthened since 2021.
Fintech investment has been on a downward trajectory. According to data provider PitchBook cited by the Financial Times, venture capital funding in the sector totalled USD 29.5 billion in 2024, a decline from the USD 34 billion raised the previous year. Alternative lending and credit companies secured the largest share of these investments.
Despite this downturn, some fintech firms have managed to sustain or grow their valuations. Revolut became Europe’s highest-valued start-up at USD 45 billion following secondary share sales, while Monzo reached a USD 5 billion valuation in a 2024 funding round.
Plaid has been expanding its offerings beyond its original business model of connecting bank accounts with third-party services. The company has introduced new solutions, including anti-fraud tools and identity verification systems, leveraging its data-sharing technology.
A significant portion of the funds raised in Plaid’s latest round will be allocated to covering tax obligations for employees whose restricted stock units are being converted into common shares. Additionally, some of the capital will be used for a tender offer allowing employees to sell shares.
For more information about Adyen, please check out their detailed profile in our dedicated, industry-specific Company Database.
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