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The valuation of US fintech Plaid has fallen by more than half to about $6bn, a victim of stubbornly high interest rates and signalling a more challenging environment for fast-growing start-ups.
Plaid, which built its financial technology business on helping consumers link their bank accounts to other websites and apps, announced on Thursday that it had raised $575mn. New investors include BlackRock, Fidelity and Franklin Templeton.
This values Plaid at $. 6.1bn, far below the $13bn-plus it was worth when it last raised funds in 2021, the peak for many fintech valuations amid rock-bottom rates at the time. When interest rates were low, investors were more willing to back start-ups that promised rapid growth in order to generate higher returns. Now that rates are no longer so low, investors are more discerning about returns.
In an interview with the Financial Times, Plaid chief executive Zach Perret acknowledged the last fundraising four years ago coincided with “the peak of the market” and its lower valuation reflected the new investment landscape.
“In 2025, tech multiples have massively compressed between the time that we raised last and today,” Perret said. “What I will say is that the fundamentals of the business underneath are dramatically stronger than they were in 2021. Revenue is much higher.”
Fundraising in fintech has slowed from its 2021 peak. Start-ups in the sector received $29.5bn of venture capital in 2024, down from $34bn the previous year, with alternative lending and credit companies securing the most funding, according to data provider PitchBook.
Some of the largest fintechs have in recent months managed to increase their valuations. Revolut became Europe’s most highly valued start-up with a $45bn price tag after completing secondary share sales last year. Similarly, rival Monzo secured a $5bn valuation in a fresh round of funding in 2024.
However, investor sentiment around the largely lossmaking open banking sector — which is built on data-sharing technology — has not picked up in the same way. London-based TrueLayer, a competitor of Plaid backed by US payments group Stripe, lost its “unicorn” status last year after its valuation was slashed by 30 per cent, down from $1bn in 2021.
Open banking was built on the promise that data-sharing would boost competition in the consumer finance sector by enabling innovative tools for consumers. However, companies are yet to prove they can be durably profitable while “pay-by-bank” solutions powered by the technology have not yet reached mass adoption.
Plaid has in recent years sought to diversify away from its core business of connecting bank accounts to websites and towards new services including anti-fraud solutions and identity-verification tools powered by its data-sharing technology.
Most of the proceeds from the fundraising will go towards paying the tax bill for employees whose restricted stock units are being converted to common stock in the company. Some of the funds will also go towards a tender offer for employee’s shares.
Perret co-founded Plaid in 2013 and the company, whose clients include retail trading platform Robinhood and Affirm, a buy now, pay later provider, is part of a growing trend for start-ups to put off going public for longer.
While it has allowed them to try to grow their business outside of the glare of public markets, it has also meant employees who are paid heavily in company stock have had an extended wait for a large payday.
Perret said he didn’t expect Plaid would “need to raise additional capital before an eventual IPO” but said there was no fixed time for any stock market listing.
“An IPO is certainly a part of the longer-term plan. We have not attached a specific timeline to it,” Perret said. “As I’ve said in the past, it will not be this year.”
In 2020, Perrett agreed to sell Plaid to Visa for more than $5bn but the deal was cancelled amid antitrust concerns from US regulators.
