Pulse News

**Plaid’s Valuation Haircut, CoreWeave’s Good Timing**

By Cory Weinberg

Mar 4, 2025, 3:32pm PST

Two very different startups, Plaid and CoreWeave, have been preening themselves in recent weeks to raise money. Their diverging fortunes show how timing, luck, and fast-changing tech trends can create and destroy value quickly.

Plaid is a victim of circumstance. The fintech startup is working on a secondary share sale, led by mutual fund Franklin Templeton, at a valuation of $5.5 billion or $6 billion, I've learned. That's less than half the $13.4 billion valuation it notched at the height of the zero-interest-rate startup boom in 2021.

The company, which sells software to allow banks and fintech apps to integrate people's financial data, has been on a roller coaster. The company grew rapidly from 2019 to 2022, thanks in part to the surge in funding for other fintech apps and soaring growth for customers like Robinhood and Coinbase. Plaid is essentially a derivative of other fintechs' fortunes, which few seemed to understand when times were good. Its 2021 fundraising occurred at peak fintech.

Then came the slowdown. Plaid's momentum nearly ground to a halt in 2023 as interest rates rose and growth of new fintech apps stalled. When it diversified its business to sell to more traditional banks, sales grew to more than 25% and annual recurring revenue hit around $400 million. Fintech customers, too, have regained some shine.

But Plaid's valuation hasn't come close to its old level. The company's new valuation would be just above what credit card giant Visa had agreed to pay for Plaid in 2020, before abandoning the deal due to antitrust scrutiny. After all that, it turned out Plaid had essentially been stuck in neutral for nearly a half-decade—a victim of its dependence on the industry it serves.

Then there's CoreWeave, which is planning one of the year's most anticipated initial public offerings later this month. CoreWeave's fate also depends on the industry around it, but in this case, the company appears to have its timing right.

At the start of the 2020s, CoreWeave was a mess. Crypto prices were tumbling, which is exactly the wrong time to be a crypto miner. The company's saving grace? The launch of ChatGPT at the end of 2022. All of a sudden, companies needed the Nvidia chips that CoreWeave had on hand to run and train large language models. Microsoft, OpenAI's benefactor, needed more data center capacity. In early 2023 it started to strike deals that eventually stretched to the billions of dollars to rent chips and data center space from CoreWeave.

With Microsoft as the tenant, private equity giant Blackstone was happy to finance CoreWeave's expansion. CoreWeave took advantage of the supercharged moment, pairing AI capabilities with mounds of private credit. And its three founders, former commodities traders, did too. They have already cashed out at least $150 million over the last year and a half. Yes, they still control a combined 80% of the company, but they have immunized themselves from an AI downturn.

Talk about good timing. What public investors will have to consider is how long the industry's tides will be in CoreWeave's favor.