Visa’s acquisition of fintech company, Plaid, has hit a regulatory wall, ending the consumer credit giant’s takeover of the data-focused fintech API startup. The deal had been valued at $5.3 billion at the time of its announcement on 13th January 2020.
However, the Department of Justice filed a suit to stop the acquisition in November 2020, reiterating that the combination would “eliminate a nascent competitive threat that would likely result in substantial savings and more innovative online debit services for merchants and consumers.”
Plaid’s technology connects applications with users’ bank accounts, thus enabling customers to use these services and apps to help plan their spending, increase their savings and monitor their investments. This, therefore, was to be a huge step in Visa’s movement away from traditional cards.
Plaid is a fintech company that connects applications with users’ bank accounts. Plaid has raised $310 million from investors including Spark Capital, Google Ventures, New Enterprise Associates, Goldman Sachs, American Express, and Citibank. Its last funding was a $250 million Series C round in December 2018 that put the startup at a $2.65 billion valuation.