Visa's Acquisition of Plaid
January 13, 2020
Forward Looking Statements
This presentation contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are identified by words such as "will," "is expected," and other similar expressions. Examples of forward-looking statements include, but are not limited to, statements we make regarding
the timing and likelihood of closing, Plaid's future success, the impact of the acquisition on Visa's growth, and the other benefits to Visa, developers, financial institutions and
consumers.
By their nature, forward-looking statements: (i) speak only as of the date they are made; (ii) are not statements of historical fact or guarantees of future performance; and (iii) are subject to risks, uncertainties, assumptions or changes in circumstances that are difficult to predict or quantify. Therefore, actual results could differ materially and adversely from Visa's forward-looking statements due to a variety of factors, including the timing and outcome of the regulatory approval process, shifts in the regulatory and competitive landscape, Plaid's maintenance of relationships with sources of data, cyber incidents, the pace and success of integration, Plaid's success in international expansion, and various other factors, including those contained in our Annual Report on Form 10-K for the fiscal year ended September 30, 2019, and our other filings with the U.S. Securities and Exchange Commission.
You should not place undue reliance on such statements. Except as required by law, we do not intend to update or revise any forward-looking statements as a result of new information, future developments or otherwise.
©2020 Visa. All rights reserved.
Strategic Rationale
Enhances Visa's role as a partner to fintech developers globally
Expansion of total addressable market | + |
Acceleration of long-term revenue growth trajectory
Best-in-class platform and team
©2020 Visa. All rights reserved.
Fintechs Serve a Large Addressable Market with Very High Growth Rates
Internet Enabled Consumers1
(Billions) | % of World | ||
Population | |||
2014 | 3.1 | 42% | |
2019 | 4.5 | 59% | |
Fintech Adoption2
- of internet enabled consumers using at least 1 fintech app
2015 | 18% | 43% |
CAGR | ||
2017 | 50% |
201975%
Users of Select Fintechs3
Fintech users growing 50%+ | ||||
(Millions) | YoY Growth | |||
Credit Karma | 100 | ~18% | ||
Venmo | 40 | N/A | ||
Coinbase | 30 | ~36% | ||
Mint | 20 | ~26% | ||
Square Cash | 15 | ~100% | ||
NuBank | 15 | ~150% | ||
Toss | 13 | N/A | ||
Clearscore | 10 | N/A | ||
Etoro | 10 | N/A | ||
Revolut | 8 | ~167% | ||
SoFi | 7.5 | N/A | ||
Circle | 7 | N/A | ||
Robinhood | 6 | ~100% | ||
Transferwise | 6 | ~50% | ||
Rainist | 5 | N/A | ||
MoneyLion | 5 | ~80% | ||
Chime | 5 | N/A | ||
Acorns | 4.5 | N/A | ||
Monzo | 3.6 | ~137% | ||
N26 | 3.5 | ~96% | ||
Dave | 3.5 | N/A | ||
Stash | 1.7 | ~100% |
Fintech Funding4
VC-backed
$120 Billion
(7,688 Deals)
in the last 5 years
59
Unicorns
Valued over $200 billion
Source: 1. Internet World Stats; 2. Ernst & Young; 3. Individual company information; Not all are Plaid customers; 4. CB Insights | ©2020 Visa. All rights reserved. |
Plaid is the Best-in-Class Platform Connecting Fintech Developers, Financial Institutions and Consumers
- Plaid is a financial data network that makes it easy for people to securely connect their financial accounts to the apps they use to manage their financial lives
- Provides safe, secure connections for 80% of the largest U.S. fintech apps
- 11,000+ bank and financial services companies
- 2,600+ fintech developers
- 200+ million consumer accounts, including one in four people with a U.S. bank account
- Headquartered in San Francisco; Founded in 2013
- Currently ~450 employees
200+ Million User Accounts
Account | Fintech | |
Authentication | Products & | |
& Authorization | Applications | |
2,600+ Fintech & Financial Institution Developers | ||
Fintech 1 | Fin. Instit. 2 | Cust. 2,600+ |
Integrate With a Single Platform
Fin. Inst. 1 | Fin. Inst. 2 | Fin. Inst. 11,000+ |
11,000+ Connected Institutions & Data Sources
Linked Accounts
Checking Savings Credit Brokerage
Data
Account Information | Liabilities | Transaction Data |
Identity Income Assets Balance
©2020 Visa. All rights reserved.
Plaid Offers a Compelling Value Proposition to its Partners
Accounts Linked to Plaid
(Millions)
200+
115%
CAGR 129
72
10 | 30 | |||
2015 | 2016 | 2017 | 2018 | 2019 |
Why Fintechs and FIs Choose Plaid
Financial | Integrated with 11,000+ |
Institution | |
financial institutions | |
Coverage | |
Uptime and tools result in
Reliabilityfewer errors and higher approval rates
Standardized data definitions Accuracyand classifications drive better
data accuracy and utilization
UserSimple and elegant interface Experienceand user experience
Benefits to Fintech
Developers
Customer | Easy and persistent |
connections reduce user | |
Retention/ | |
attrition and drive higher | |
Acquisition | |
satisfaction | |
A single integration gets | |
Cost | developers full coverage of |
Savings | their users' financial accounts, |
saving time and money | |
Transaction | Fresh, accurate and well- |
structured data delivers higher | |
Reliability | transaction success rates |
Layered security and strong | |
Security | authentication drive down |
both suspected and confirmed | |
fraud rates |
Source: Plaid | ©2020 Visa. All rights reserved. |
Plaid Expands Visa's Addressable Market
by Providing High Value Services to High Growth Fintechs
Growth Opportunities in Key N.A. Fintech Verticals
Plaid Penetration | Portion of Vertical Not Penetrated | ||||||
Current Client | |||||||
Banking & Investing: 5% of ~$650M TAM | Examples | ||||||
Lending:2% of ~$1000M TAM
International Expansion Opportunity
There are ~15x more fintech users in International markets vs. U.S.
Int'l
Consumer Payments: 3% of ~$950M
U.S.
Int'l
Financial Management: 4% of ~$350M TAM
Business Services: 7% of ~$200M TAM
U.S. | |
Plaid | Fintech Market |
Visa Accelerates Plaid's
International Expansion
Source: Plaid based on current products for North America | Fintech Market Source: Ernst & Young | ©2020 Visa. All rights reserved. |
Plaid Accelerates Visa's Network of Networks Money Movement Strategy
Global Reach Through Integrated Payments
Customer/ | Fintech and | Card | Financial | |
End User | Other App | ACH/RTP | Institutions | |
Developers | Digital Wallets | |||
- Enhanced coverage of P2P and B2C use cases by integrating connector and payment services for fintechs
- Acceleration ofcross-border, network of networks money movement strategy by enabling fast and easy bank account authentication
- Best-in-classsolution for our clients in International Open Banking markets
- Integration of value added services - e.g. security, identity, dispute resolution - to payment solutions
offered to fintechs
Transaction Overview
Financial | •$4.9B cash consideration |
•Approximately $400M of retention equity and deferred equity consideration in the form | |
Consideration | |
of Visa Restricted Stock units | |
Expected | •Fiscal Year 2021 revenue growth acceleration of 80-100 bps |
•Fiscal Year 2021 non-GAAP1EPS dilution of 100-150 bps | |
Financial Impact | |
•Expect transaction will be accretive to non GAAP EPS at the end of year three | |
Business | •Plaid CEO and co-founder Zach Perret will continue to run the business, reporting to |
Leadership | Visa Chief Product Officer, Jack Forestell |
•Fund cash consideration with cash on hand and new debt issuance at the | |
Capital | appropriate time |
Structure | •No impact on our capital allocation strategy, including our previously announced stock |
buyback program and our dividend policy | |
Expected | •Close in 3-6 months |
Timing | •Subject to required regulatory approvals and other customary closing conditions |
1Non GAAP EPS excludes amortization expense of acquired intangible assets, retention equity and deferred equity consideration expense, as well as non-recurring transaction and integration costs | ©2020 Visa. All rights reserved. |
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Visa Inc. published this content on 13 January 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 January 2020 22:22:07 UTC