Plaid, a company that connects financial applications to users’ bank accounts and enables payments and data verification, confirmed to TechCrunch on Thursday that it has allowed employees to value some of their own shares at a valuation of $8 billion.
This valuation is a 31% increase over the $6.1 billion valuation the 13-year-old company achieved through a $575 million investment led by Franklin Templeton in April last year. At this time, the company raised $575 million, led by Franklin Templeton, for partially the same purpose, including buying stock from employees and helping cover the taxes associated with converting expiring restricted stock units (RSUs, a form of equity compensation) into stock.
Despite the new, larger headline figure, Plaid’s valuation is still 40% below its 2021 peak of $13.4 billion, when ultra-low interest rates led to a significant surge in fintech valuations.
Such transactions are becoming increasingly common among private companies that use liquidity as a holding tool. Recent examples include Stripe, which this week said it would allow employees to sell stock at a valuation of $159 billion, as well as Clay, ElevenLabs and Linear.
Beyond retention, it relieves pressure on management to pursue an IPO before the company is ready to help employees cover the tax bill that arises when the RSUs vest.
