Visa Buys Plaid • Hacker News Board

Re: Visa Buys Plaid

#51

Post by tempsy » Mon, Jan 13, 2020, 10:19 PM UTC

erikig wrote: post #45

amluto wrote: post #43

Earlier quoted context omitted.

I’m personally a bit surprised that banks haven’t embraced U2F / WebAuthn as a way to disable Plaid.

On the contrary - Banks are falling over themselves to embrace Plaid, Finicity, Decisionlogic, Yodlee and all their ilk because failure to do so will result in the departure of their customers to a bank that supports all the new fintech apps that rely on these API providers.

No, if anything banks have been catching on to Plaid and many have decided to stop supporting it e.g. Capital One has been on/off it for years.

Banks aren't exactly happy that their API is basically scraping their website, for very valid reasons, including the customer's own security.

If enough of the big banks decided they had enough of Plaid then it would present a massive existential threat to the business. If anything, I think that threat is a reason why they wanted an exit sooner rather than later.

Re: Visa Buys Plaid

#52

Post by bradstewart » Mon, Jan 13, 2020, 10:20 PM UTC

pilingual wrote: post #40

Visa invested in their Series C[0], so it seems unusual that they'd also acquire the company (why not acquire it back then?). Any ideas why this might have happened? Past examples? [0] https://www.crunchbase.com/organization/plaid#section-fundin...

They wanted to see what Plaid could accomplish with a little more money (and time) before spending a lot of money on the company. They liked what they saw and wanted full control.

Or they realized Plaid was becoming too valuable to its competitors. Or they didn't have the cash available at the time. Or Plaid didn't want to sell at the time.

Google Ventures participated in funding a number of companies that Google later acquired.

Re: Visa Buys Plaid

#53

Post by sdnlafkjh34rw » Mon, Jan 13, 2020, 10:21 PM UTC

brunoTbear wrote: post #17

tempsy wrote: post #16

Earlier quoted context omitted.

> No offense to Visa, but I don't think of them as the most innovative organization Visa is a $434B company. I guess "innovative" is subjective but their valuation trajectory has looked like a high growth tech co over the past 5 years.

That's fair. 3x valuation growth in the last 5 years is tech company level. More or less the same trajectory as GOOG and FB. It's not Stripe or Airbnb level growth, however.

That's just a function of their size. I guarantee you that Stripe and Airbnb's growth rates will drop to these types of growth rates if they hit the 100B valuation. The truth is when you are so large, the opportunities for growth become smaller and smaller. It's much easier to grow at high percentages when you are small. Buffet talks about this a lot with Berkshire; he has said he could grow Berkshire at a much higher rate if the company was smaller. Now he has to pass on amazing investment opportunities that are too small for him.

Re: Visa Buys Plaid

#54

Post by j45 » Mon, Jan 13, 2020, 10:22 PM UTC

This is too bad if they sell this prematurely

Re: Visa Buys Plaid

#55

Post by nitrogen » Mon, Jan 13, 2020, 10:23 PM UTC

A4ET8a8uTh0 wrote: post #49

coachtrotz wrote: post #31

Earlier quoted context omitted.

Here is pertinent verbiage from the Plaid Privacy Statement. Information we collect from your financial accounts. The information we receive from the financial product and service providers that maintain your financial accounts varies depending on the specific Plaid services developers use to power their applications, as well as the information made available by those providers. But, in general, we collect the follow…

I never used Plaid, but it reads like information used in typical bank application for credit. Why would anyone willingly share this much without get something major in return? Does Plaid bank the underbanked? I am not sure what their appeal is.

They provide data for things that are like Mint (but not Mint itself).

Re: Visa Buys Plaid

#56

Post by xj9 » Mon, Jan 13, 2020, 10:23 PM UTC

i always hope that new exciting companies will work towards a sustainable business model that can exist without a buyout from some mega. i understand that its difficult to start a business, much less a sustainable one, but its sad to see such promising companies grow into a pitch instead of a business.

maybe its a good thing i didn't get hired for their SLC office, because i would have quit over this.

Re: Visa Buys Plaid

#57

Post by JakeTheAndroid » Mon, Jan 13, 2020, 10:24 PM UTC

pilingual wrote: post #40

Visa invested in their Series C[0], so it seems unusual that they'd also acquire the company (why not acquire it back then?). Any ideas why this might have happened? Past examples? [0] https://www.crunchbase.com/organization/plaid#section-fundin...

Make sure it worked. Also, Plaid didn't have any data to buy when it first started. Now, they have tons of data.

Had Plaid only been mildly successful, Visa likely would have just continued to let it run and get back its investment. But, now they have a decent amount of transaction data among other things, possibly making it more advantageous to own it outright than hope you can be one of many partners getting access to that data.

Re: Visa Buys Plaid

#58

Post by erikig » Mon, Jan 13, 2020, 10:24 PM UTC

pilingual wrote: post #40

Visa invested in their Series C[0], so it seems unusual that they'd also acquire the company (why not acquire it back then?). Any ideas why this might have happened? Past examples? [0] https://www.crunchbase.com/organization/plaid#section-fundin...

It seems like their investment might have been a way to dip their toes into the water. It probably allowed VISA the ability to do their due diligence and assess whether the Plaid team would execute on the stated vision.

Re: Visa Buys Plaid

#59

Post by brunoTbear » Mon, Jan 13, 2020, 10:24 PM UTC

loeber wrote: post #23

brunoTbear wrote: post #3

Will be interesting to see the terms for the acquisition and see if Mary Meeker's last investment for KP was a winner or not! I'm cautiously optimistic for a good outcome for the Plaid folks here: last round was two years ago for $250M. Could they have been suffering $10M/month losses and are running out of money? Could be. No offense to Visa, but I don't think of them as the most innovative organization or one that…

Looks like the acquisition price is $5.3 billion[0], so it looks like it's a real winner for its investors. [0] https://www.streetinsider.com/Corporate+News/Visa+%28V%29+to...

Nice to have the number to sate my curiosity! Thanks for the link!

Re: Visa Buys Plaid

#60

Post by thorgaardian » Mon, Jan 13, 2020, 10:25 PM UTC

pilingual wrote: post #40

Visa invested in their Series C[0], so it seems unusual that they'd also acquire the company (why not acquire it back then?). Any ideas why this might have happened? Past examples? [0] https://www.crunchbase.com/organization/plaid#section-fundin...

I’d speculate this is likely a result of one or both of the following:

1. A de-risking strategy. Investing early effectively discounts a future acquisition, but doesn’t go so far as to bet the farm on the businesses success. They would also gain very early and regular access to financials that would tell them if it’s worth the follow-up plunge or if it is on its way to bust. 2. The founders thought there was more room to grow independently, but wanted to keep Visa friendly and close to home. Best way to do that is to change an acquisition conversation into a partnership/investment conversation.