Plaid $8 billion in employee stock sales

Plaid, the company that connects financial apps to users’ bank accounts, enabling payments and data verification, has allowed employees to sell some of their shares worth $8 billion, the company confirmed to TechCrunch on Thursday.

The valuation represents a 31% increase from the $6.1 billion valuation the 13-year-old company achieved in April of last year, when it raised a $575 million round led by Franklin Templeton for partly the same purpose: to buy stock from employees, including helping them cover taxes associated with converting expired restricted stock units (RSUs, a form of stock compensation) into stock.

Despite its new, larger headline number, Plaid’s value is still 40% below its peak of $13.4 billion in 2021, when ultra-low interest rates led to a massive increase in fintech valuations.

Such transactions are becoming increasingly common among private companies that use liquidity as a holding tool. Recent examples include Stripe, which said this week it would allow employees to sell $159 billion worth of stock, as well as Clay, ElevenLabs, and Linear.

Besides retaining and helping employees cover the tax bills that come into play when RSUs vest, it relieves the pressure on management to pursue an IPO before the company is ready.