Jayni Shah

6) Began as a very different business: Stated value prop in their seed deck: “For users we are building a card-linked personal profiling and and discovery application. For businesses, we’re creating the most robust customer analytics platform for the offline retail world.”

(c) Plaid has been comp’ed to the likes of @twilio. API companies that are generally high-margin businesses and loved by the public markets. IMO there had to be an API layer for banking/ financial services, and Plaid has owned that space

(b) Acquirers need new growth engines and are using M&A to meet growth targets. Visa did $23B in net revenue for FY’19, up 11% from 2018. This acquisition will expand V’s overall TAM (by growing its footprint in fintech), accelerating long-term revenue growth

(a) Acquirers are not being penalized (but appear to be rewarded) for pursuing large acquisitions even when richly priced. Just check out analyst reactions to PayPal’s $4B acquisition of Honey in November '19

5) Fintech deals are getting done at RECORD high multiples. Plaid has received somewhere between 35-50x multiple on revenue. PayPal acquired Honey for ~40x Revenue. These companies are being valued like best-in-class SaaS companies. Here’s why:

4) V is a trusted partner to the banks. Plaid’s relationship with 'em is more contentious. Remains to be seen if the acquirer’s heft promotes a new standard of open-banking, or if the banks feel even more dis-intermediated from the end consumer, a relationship they once owned

(c) V’s biggest competitor, MC, has long positioned itself as fintech-forward. It recently launched Mastercard Accelerate to “support [fintechs] from startup to expansion.” Eg: fintech-as-a-service Rapyd, will partner with MC to issue cards for @RapydPayments corporate clients

(b) As more transactions become virtual, neobanks like @RevolutApp have the potential to cannibalize @Visa's cards business in the long-term. Yet near-term, the networks are compelled to partner with these upstarts for distribution

3) It's a nod to the relevance of consumer fintech + a bet on how will move in the future via DIGITAL & NON-CARD PYMTS Most of the use cases Plaid powers don't involve debit/credit cards (Visa’s core products). It's the card network saying: the future won't be so card-centric

2) @Plaid (just like @Stripe) gets a premium valuation for 1 big reason: it locks in a customer segment that is growing EXPONENTIALLY and operates in a market that is BOOMING

(a) In their strategic rationale deck, @Visa says @Plaid “enhances Visa’s role as a partner to fintech developers globally”. On the investor webcast, @Visa’s CEO said "[the deal] positions Visa to capitalize on the fintech-driven evolution that is happening in financial services"

1) Traditional financial services companies are acquiring the “tech” needed to partner with (and re-position themselves as) “fintechs". 3 out of every 4 internet users in the use at least 1 fintech app, so incumbents like @Visa must find ways to keep up

Back on Twitter after spending the weekend offline in and could not be happier to celebrate @Jocelynkinsey from afar! Excited for her and all the founders who get to work with her Congrats Joce and @dfjgrowth! What an all-star team https://twitter.com/anarghya503/status/1208233906224291840 …

Very cool product launch by my brilliant sis @SachiAShah! Good example of the trend towards consumerization within enterprise: @LightStepHQ using gamification to onboard engineers trying to understand Observability and Tracinghttps://twitter.com/SachiAShah/status/1202318447788478469 …

Important observation from Mark— formerly @magento — about how the full-stack commerce/payments platform improves the end customer experience. And the customer doesn’t just have to be a consumer; similar disruption is beginning to happen in B2B.https://twitter.com/mtlenhard/status/1198019137257144320 …

9) I predict many more exits at intersection of commerce + payments going forward. Universe of acquirers is massive– aggregate value of Paypal, Square, Shopify, Stripe, Adyen is $235B+; legacy institutions estimated at $4500B+... with many trying to become full-stack!

8/ “We believe that we operate in an addressable market that is $110 trillion. And our long-term aspiration as a company is to have somewhere between 10% and 15% market share of that.” @Dan_Schulman, CEO of PP