Back in startup mode: Plaid's Head of UK on how pulling the plug on Visa’s $5.3bn takeover deal will help Plaid in Europe

By Aisling Finn on Monday 18 January 2021

FeaturesDigital Banking

Just days after Plaid's acquisition unravelled, AltFi caught up with its UK boss Keith Grose to discuss what it all means for the fintech in Europe.

Back in startup mode: Plaid's Head of UK on how pulling the plug on Visa’s $5.3bn takeover deal will help Plaid in Europe
Image source: Keith Grose/Plaid.

It’s never a quiet January at the Plaid headquarters.

Last week the fintech pulled out of a $5.3bn takeover deal with Visa, just 363 days after the deal was first announced. 

The world of fintech was whipped into a frenzy last Tuesday evening as news of the deal collapsing first broke and not long after people were analysing the decision from all angles to try to ascertain what could be next on the cards for Plaid.

AltFi caught up with Keith Grose, head of UK at Plaid, to hear straight from the horse’s mouth just what this means for Plaid here in the UK and Europe.

Startup mode

“We like to start the New Year with a bang! It was the acquisition last year and this year we decided, no let’s go it alone,” Grose joked.

Just 363 days separate two of the biggest announcements in Plaid’s timeline.

Firstly, last January Visa and Plaid announced that the payments giant would acquire the Silicon Valley startup for $5.3bn a price tag which was roughly double Plaid’s private valuation of $2.65bn and then this year came the decision to pull out of the aforementioned deal.

“It was mutual, but we’ll stay connected,” Grose told AltFi, “Visa will still remain an investor and they’ll be a partner and it actually doesn’t change our UK and European strategy or presence at all.”

“If anything, it makes it a more important and key factor in what we’re focussing on at Plaid. We’re back in startup mode and we control our own destiny,” he added.

Plaid first touched down in the UK back in May 2019 and has since notched up a host of UK and European fintech clients, including the likes of all-your-cards-in-one fintech Curve, rental fintech Canopy and digital banking giant Monzo.

The UK manager teased that there’s still a lot more just around the corner: “We have lots of great product launches around open banking and payments that are coming up and we will be launching in new geographies too.”

Hindsight is 2020

The initial takeover deal was announced no less than two weeks into 2020, “the Plaid announcement really kicked off the dominoes last year,” Grose told AltFi, and it remained one of the most-talked-about announcements for most of 2020, but it didn’t dampen down Plaid’s plans.

In 2020 alone, Plaid’s customer base grew by 60 per cent to more than 4,000 companies using its APIs, including big names like Microsoft and PayPal, with plans to continue expanding across all regions as Covid-19 has accelerated the need for digitalisation.

“Covid-19 definitely increased the acceleration of adoption of fintech and all the companies underneath it and powering it,” Grose told AltFi.

“I don’t think the announcement will do anything to pour cold water on the fintech ecosystem, I think it’s still thriving and is coming out of the pandemic stronger than ever.”

One of the reasons why Plaid and Visa pulled the plug on the takeover deal was the lawsuit filed by the Department of Justice in the US, “lengthy litigation would interrupt, not accelerate, the work we are doing to build the infrastructure supporting fintech,” a statement from Plaid read.

Plaid said that it sees the biggest demand for payments technology in Europe, mostly new payment method adoption and embedded finance.

Grose told AltFi that the decision to stop Visa’s takeover of Plaid is actually instrumental to driving open banking across Europe: “It makes driving the success of open banking payments and the success of that whole ecosystem around fintech that much more important to us.”

The UK manager also promised that the announcement falling on the third anniversary of the implementation of PSD2 was just a happy coincidence and not a well thought out plan.

Next on the cards

As for what’s coming next for Plaid in Europe and the UK, Grose said that his mission is to hammer home the importance of open banking.

“One of the themes coming out of the acceleration of fintech form last year and continuing into this year is the increasing importance of embedded finance and taking financial services to meet users where they are,” Grose told AltFi.

“I think open banking payments and building new functionality will be the story of what we’re focussed on in Europe in 2021,” he added.

Lots of new products and company announcements are on the horizon for the Silicon Valley fintech and bringing open banking to the masses.

Grose also remained shtum on fundraising now that the Visa takeover is out of the question: “That’s definitely a no comment for now. We feel good about where we are but obviously, we’ll do whatever we need to ensure we’ll be around for a long time.”

Despite only being a new arrival to the European fintech scene, Plaid has very much made itself at home and has found itself in favour with policymakers and regulators—the Competitions and Market Authority (CMA) gave the takeover the green light despite its American cousin, the DoJ, not being so sure. 

There are endless possibilities for what Plaid can achieve now that it is back in control of it’s “own destiny” and here’s hoping it doesn’t wait until January 2022 to break the news. 

Sign up for our newsletters

Your daily 7am download of all things alternative finance and fintech.

Fintech and alternative finance headlines with an exclusive Editor's Note each week. Delivered Monday at midday.

AltFi's new weekly US newsletter breaking down the ins and outs of America's burgeoning fintech sector. Delivered Monday 9am EST/ 6am PST.