Plaid is one of the most exciting fintech unicorns in recent years. As a critical infrastructure for connecting consumers’ bank accounts to financial apps, Plaid has seen tremendous growth since its founding in 2012. However, Plaid remains a private company and direct investment is restricted to institutional investors. This article will explore four potential ways for investors to gain exposure to Plaid before its eventual IPO.
Invest in Plaid’s competitors like Yodlee
While not a direct investment in Plaid, investors can buy stocks of Plaid’s competitors in the fintech data aggregation space like Yodlee, which was acquired by Envestnet in 2015. These competitors may benefit if Plaid stumbles or can take market share from Plaid. However, Plaid has achieved clear leadership so far.
Invest in Plaid’s key partners like Stripe
Some of Plaid’s key partners that leverage its data aggregation APIs like Stripe have already gone public. Buying stocks in these partners allows indirect exposure to Plaid’s growth. However, the correlation may be limited since Plaid works with many other firms.
Invest in Plaid’s major customers like Venmo
Plaid powers many leading fintech apps by providing bank account connectivity. Investing in Plaid’s customers like Venmo or Betterment offers derivative exposure to the growth of Plaid. But these apps have diversified revenue streams beyond just Plaid.
Gain secondary exposure through Plaid’s investors
Major institutions like Kleiner Perkins, Goldman Sachs, and Mastercard that invested in Plaid may benefit from its eventual liquidity. Investing in these public companies provides some indirect exposure to Plaid’s upside. However, Plaid is likely a small part of their broader portfolios.
Although Plaid remains private, investors can gain exposure by investing in its competitors, partners, customers and historical investors. But the correlation to Plaid’s performance may be limited. The best way to invest in Plaid is still waiting for its eventual IPO.