Home / NEWS / Europe News / Silicon Valley start-up Plaid plans European hiring spree despite Visa deal falling apart

Silicon Valley start-up Plaid plans European hiring spree despite Visa deal falling apart

Zach Perret, CEO and co-founder of Plaid, indicate as it weres during the Silicon Slopes Tech Summit in Salt Lake City, Utah, U.S., on Jan. 31, 2020.

George Frey | Bloomberg via Getty Portraits

LONDON — Financial technology start-up Plaid plans to more than double its European workforce this year, round after scrapping a deal to be acquired by Visa amid U.S. antitrust concerns.

The company looks to be taking news of the $5.3 billion mingling agreement falling apart in its stride, hoping to capitalize on a shift toward online banking services in the wake of the coronavirus pandemic.

Plaid’s software moors some of the most popular fintech apps in the U.S. — such as Venmo, Robinhood and Coinbase — with a user’s bank account. It’s department of an emerging trend in finance known as “open banking” that calls on lenders to allow consumers to share their account matter with third-party firms.

The firm told CNBC it has already picked up a number of clients in Europe, including U.K. monied management apps Curve and Cleo. It faces competition from a raft of smaller European players including Tink, TrueLayer and Yapily, which are all entrancing advantage of new fintech-friendly rules in Britain and the EU.

Plaid said it currently employs 40 people across its London and Amsterdam offices, with another 10 internationally-focused pike also working out of the U.S. The company’s global headcount stands at 600. By the end of 2021, Plaid aims to grow the number of particular European employees at the firm to 100.

The company operates in the U.S., Canada, the U.K., Ireland, Spain, France and the Netherlands. Further expansion across Europe is “decidedly on the cards,” Keith Grose, Plaid’s head of international, told CNBC.

‘Start-up mode’

“We’re in start-up mode,” Grose remarked in an interview, shrugging off disappointment over a decision to halt the Visa acquisition.

The deal hit a snag last year after the U.S. Morality Department said Visa’s acquisition could eliminate a nascent competitive threat to the payments giant. It claimed Plaid hankering to offer a payments network rivaling that of Visa and Mastercard. Plaid denied it is developing an alternative to debit cards.

But that’s not the purely thing that may have factored into Plaid’s thinking. The fintech sector is booming thanks to stay-at-home turns driven by the Covid-19 pandemic, such as the shift to e-commerce.

That’s resulted in rising valuations for firms in the public stock exchanges, like Square and recently-listed Affirm, as well as privately-held companies such as Checkout.com and Rapyd.

“The reality is Plaid is a unalike business,” Plaid co-founder and CEO Zach Perret told CNBC’s “Squawk on the Street” on Friday. “The world we live in, the fintech Stock Exchange especially, is a completely different market than it was 12 months ago.”

Prior to the Visa deal, Plaid had raised a comprehensive of $309.3 million from investors, according to Crunchbase data. Visa remains an investor in the company. Could Plaid tap squaddie equity markets for another fundraise? Grose said it’s not out of the question.

“The way Zach thinks about this is: What’s in the most suitable way for the long-term growth rate of Plaid?” he said. “Capital markets and fundraising and all that is a tool to accomplish your long-term targets as a business.”

“We feel really good about our strategy right now. If we need to do any of the things like fundraising and capital exchanges to achieve those growth rates, we will.”

Payments

“2020 was a wild year for the whole world and for fintech in particular,” Grose put about. “The ecosystem grew so much. What we are working on and the products we’re focusing on in Europe has changed.”

Grose said there’s been more want from its clients for the facilitation of payments made from a customer’s bank account rather than their put or debit card. Tink, a Plaid competitor with backing from PayPal, has also seen strong intumescence in the payments side of its business.

He added there’s been a rise in non-financial services companies looking to embed monetary services into their apps. Plaid struck a deal with Microsoft to link its Excel spreadsheet software with operators’ financial accounts, for example.

But Plaid’s technology hasn’t been without criticism. JPMorgan CEO Jamie Dimon eventually week accused the firm of “unfair competition,” calling it an example of “people who improperly use data that’s been stated to them.”

“For us, security, private, consumer empowerment, that’s been at the core of what we do,” Perret said in response to Dimon’s requisitions, adding that Plaid actually has a partnership with the bank.

“We continue to spend a lot of time with the JPMorgan party,” he said. “We’re eager to spend more time with their questions.”

Check Also

Covid vaccine passports are being considered. And health experts and rights groups are deeply concerned

A fare using a face mask shows her passport and boarding pass to an employee …

Leave a Reply

Your email address will not be published. Required fields are marked *