January 13th: Visa Buys Plaid for $5.3 Billion— Goldman’s New Marcus App

Hello hello, Ian here. Hope everyone’s had a great start to the year. I’ve been super busy chatting with sponsors and partners about FTT. 

We have a lot of fun things planned his year, especially around community and events. If you’re interested in working with us, hit me up at ian@fintechtoday.co

We recorded the first episode of the FTT podcast last week—had an awesome conversation with Lolli CEO Alex Adelman about how he got into fintech and the convergence of fintech and e-commerce. Our podcast is launching next month, first for FTT+ subscribers. 

Speaking of FTT+, the first issue of our premium newsletter went out last Thursday (if you signed up and didn’t get it, please let me know ASAP!) We’re also working on a website for Fintech Today in general so things have been a bit hectic. 

Sign up for FTT+ (discounted $15/month)

Music-wise, Drake & Future’s track “Life Is Good” came out the other week, and it’s been on repeat since. I like it a lot, though its essentially two songs: Drake’s laid back verse and chorus has some great lines, but Future’s verse makes you wanna turn up a bit (which I haven’t done in ages...I’m boring af now.) 

Visa Buys Plaid for $5.3 billion

Well most of the fintech predictions for 2020 (including mine on FTT+) said to expect acquisitions this year. But for the life of me, wouldn’t have guessed Visa would be buying Plaid for $5.3 billion. (I’m writing this at 4pm cause I have plans tonight, so the info here might be a bit outdated by the time we publish.)

Here’s Visa’s deck on the acquisition.

Strategically this makes a ton of sense—Plaid has developed an extremely robust ecosystem to enable fintech companies and Visa. For Visa, an intermediary in the payment processing world that makes money by acting as a middleman, Plaid makes sense, since they do the same for fintech companies and customer data. It’s part of the reason Visa (and MasterCard) invested in Plaid in 2019. 

Another point: this was probably a defensive move by Visa. To many in the industry, Plaid was always a potential threat to Visa—by enabling startups to connect to banks, they created a network similar to Visa, and there wasn’t much stopping Plaid from connecting startups together to enable transactions between the two and bypass Visa (of course, that became less likely when Visa and MasterCard invested.) 

I’m a bit flustered over all this—it was really unexpected, though I had heard rumblings that there was supposed to be a big deal this week, I really didn’t expect this. I’ll probably have more thoughts over the next week, and if you wanna jam about it, text me or email me at ian@fintechtoday.co!

Also props to Anmol and Katie (who DM’d me her answer)—they both guessed $5.2 billion! 

Goldman Sachs’ Marcus Launches Mobile App

Ah, apps. CNBC’s Hugh Son wrote that Marcus quietly rolled out a Marcus-branded mobile app at the beginning of the year. It’s an interesting strategic decision that I want to dive into a bit. 

The app itself is slick and beautiful—Goldman bought Clarity Money and has a solid team of product managers and developers in-house, so the sleekness isn’t surprising. And its straightforward too—you can connect your accounts, sign up for a savings account or a personal loan, and that’s pretty much it (there’s some content, which I expect them to do a lot more of—Marcus started a newsletter for users a few months back.)

Strategically, I think it makes sense for Marcus to make an app, though I’m a bit bearish on apps in general. For most companies, the cost per download is increasing at a steady rate, and with the increasing competition in the fintech app market, I expect that’ll go up over the foreseeable future. But for Marcus, with Goldman’s backing, doesn’t really have to worry about that—my assumption is that the app will be focused on enhancing the user experience for existing Marcus customers and upsell them on other financial products down the line. 

The timing is interesting too—lot of banking industry folks that I know that keep track of Goldman are eagerly awaiting the company’s first ever Investor Day. Investor Days are when the management of a public company meets with a select group of investors to explain their strategic thinking and long term goals for the company. It’s a way for the firm to assuage investors about any concerns they may have. Goldman, in it’s 151 year history, has never had to assuage concerns for investors. But with new initiatives like the Apple Card partnership and Marcus becoming more of a focal point—along with secular trends around banking investor day’s—investors are expecting more transparency from even firms like Goldman. 

The WSJ says that Goldman’s expected to give some clarity around Marcus and its consumer unit to investors, many who view it as a money suck and a waste of time. If Goldman is going to change that thinking, and push investors to view consumer products and Marcus as the future of customer acquisition for other Goldman products, the Marcus app is going to be an important part of that conversation. 

FTPartners’ Challenger Bank Report

Have you ever read something and gotten jealous that you didn’t do it? Thats what I feel when I read FTPartners reports on the fintech industry. A recent one on challenger banks across the world was a great read and filled with a ton of details. 

There’s way too much to summarize, so I highly recommend reading the report (link below.)

Read FTPartners’ Challenger Bank Report

I’m a big proponent of taking time off—as someone who’s struggled with burning out and stress related issues from work, I know first hand just how difficult it can be to focus on work when you’re going through shit. So I very much support Rob’s tweet here. 

Enjoyed this thread from Sam Altman on how to be successful:

If you don’t follow Michael Gilroy on Twitter, I definitely recommend it. 

My homie Alex Cohen did a great graphic of how banks are being unbundled:

I have a lot of thoughts on this, but the graphic is really interesting:

The next time I hear about a fintech company complaining about how long it takes to develop financial products, I’m going to send them this (yes financial products are hard because of the regulation but hardware is fucking hard.)

Funding News of the Day

Not a funding announcement but Visa bought Plaid...lol.