Plaid, a company that connects financial applications to users’ bank accounts for payments and data verification, has allowed employees to sell some of their shares at an eight billion dollar valuation. The company confirmed this transaction on Thursday.
This new valuation marks a thirty-one percent increase from the six point one billion dollar valuation the thirteen-year-old company achieved in April of last year. At that time, Plaid raised five hundred seventy-five million dollars in a round led by Franklin Templeton. That funding was also used in part to purchase shares from employees, including to help them cover taxes associated with converting expiring restricted stock units into shares.
Despite this larger headline number, Plaid is still valued forty percent below its peak of thirteen point four billion dollars in 2021. That peak occurred when ultra-low interest rates drove a massive surge in fintech valuations.
Such share transactions have become increasingly common among private companies, which use liquidity as a tool for employee retention. Recent examples include Stripe, which this week said it would allow employees to sell shares at a one hundred fifty-nine billion dollar valuation. Other companies like Clay, ElevenLabs, and Linear have conducted similar offers.
Beyond aiding retention and helping staff cover tax bills triggered when equity vests, these transactions relieve pressure on company management to pursue an initial public offering before the business is ready.