01.21.20 - It hasn't even been a full month and we have seen the biggest acquisition of the year. Visa just scooped up Plaid for $5.3 Billion, DOUBLE it's last private valuation. Plaid is one of the emerging dark FinTech unicorns next to Stripe, where Stripe is dethroning PayPal with developer-friendly payment processing, Plaid builds financial services API's. This acquisition is smart, and it stands to reason that they didn't overpay, they actually got a bargain. The purchase not only buys them a front-row ticket into competing alongside new gen players in online payment services & processing but also protects any related core businesses and eliminates the possibility of a competitor scooping the company up and getting a foothold in the space.
This may change the perspective on private valuations in some eyes, that not all companies are going to be like WeWork with unrealizable economics and founders drunk on venture dollars. Some private companies can, in fact, have high valuations that aren't tied to revenue multiples and are valued based on potential market realization and intellectual property value.