Plaid Inc., the financial-technology company poised for an initial public offering, raised $575 million in a funding round from longtime existing investors Ribbit Capital and NEA and new institutional backers including Fidelity Management & Research Co., BlackRock Inc. and Franklin Templeton.

Plaid raised the round – which the firm said was oversubscribed and led by Franklin Templeton – at a $6.1 billion valuation, according to a company spokesperson, far lower than its $13.4 billion valuation from 2021. Fintech valuations retreated across the board in 2022 amid rising interest rates and geopolitical instability. Bloomberg News previously reported on plans for the latest share sale.

Among the other participants in the funding round was 1789 Capital, which invested $50 million, according to a person familiar with the matter. A representative for 1789 Capital declined to comment.

The fintech plans to use the capital to address tax obligations linked to the conversion of expiring restricted stock units to shares, according to a company blog post, and offer liquidity to Plaid employees. It’s a common approach, with the volume of secondary transactions soaring among Silicon Valley firms that have delayed their IPOs but still want staffers to receive payouts and stick around. Payments firm Stripe Inc., for example, has repeatedly made tender offers to its employees.

Since its 2021 fundraising round, Plaid has both diversified its business and grown significantly. The company notched almost $400 million in revenue last year, according to a person with knowledge of the matter who asked not to be identified because the information isn’t public. At least half of all U.S. consumers have encountered the firm’s technology in some way, and the company has moved beyond offering just the technology that links bank accounts to fintech apps and into credit and anti-fraud products.

The valuation dip can be explained by how the market has changed since the previous funding round, Chief Executive Officer Zach Perret said in an interview. The firm raised $425 million at the peak of the fintech-funding frenzy in 2021. Valuations across the sector have slumped significantly since then, he said, but Plaid’s “underlying fundamentals” remain strong.

“We feel this is an amazing state for continued long-term growth,” he said.

Unlike companies such as Stripe, which hasn’t committed to a public filing, Perret made clear that’s the path forward for Plaid, without defining a timeline for doing so. Klarna Group Plc is preparing for an IPO, likely to come this month, with Chime Financial Inc. expected to follow.

“We’re in a point of high optimism, but everyone’s cognizant in fintech that there’s quite a lot of work to do,” Perret said. “Everyone in the fintech market will be closely watching these.”

(Updates with 1789 investment in third paragraph.)