At payments giant Stripe Raised $600 million with a 2021 valuation of $95 billion, it made headlines for raising capital at the highest valuation ever for a private startup.
Defending that valuation seems challenging. The fintech company has reportedly approached investors to raise more capital — at least $2 billion — at a valuation of $55 billion to $60 billion. According to the Wall Street Journal, Stripe wouldn’t use the money for operating expenses, but rather to cover a large annual tax bill related to employee stock. It is not clear if talks are still ongoing.
That information came to light on the same day that Stripe allegedly told employees this was the case set a term of 12 months for themselves to go public or pursuing a private market transaction.
australiabusinessblog.com reached out to Stripe, who responded with “no comment.”
The news comes after several months of apparent battle at Stripe. It’s November laid off 14% of the workforce, or about 1,120 people, say yes “hired for the world we are in.” And the company has downgraded its internal valuation more than once in the past year. Earlier this month, australiabusinessblog.com reported that Stripe had lower internal valuation to $63 billion. That 11% reduction came after an internal valuation cut that occurred for six months prior, which valued the company at $74 billion.
Raising more capital at a valuation of $55 billion to $60 billion would certainly be characterized as a round of downside — but Stripe wouldn’t be the first major fintech to do so. Fellow European and BNPL giant Klarna raised $800 million last year at a valuation of $6.7 billion, down 85% from the $45.6 billion it was valued at in June 2021.
In 2021, Stripe reportedly grossed $12 billion in gross sales and EBITDA was profitable, according to Forbes. The company’s products, in its own words, enable payments for online and in-person retailers, subscription companies, software platforms and marketplaces, “and everything in between.” It has not disclosed any revenue figures since 2021.
Stripe is one of many highly regarded fintech startups that have hit bumps in the road lately. In December, decacorn Plaid fired 260 employees, or about 20% of the workforce, say it “hired and invested ahead of sales growth.”
Notably, the two companies had a bit of a public spat last year – despite being partners – when Stripe revealed in May a new product, Financial connections. That new product is designed to give Stripe’s customers a way to connect directly to their customers’ bank accounts, to access financial data to expedite or execute certain types of transactions — exactly what Plaid has done in the past. did. Plaid came out swinging months later and unveiled his own pushing payments.
Founded by Irish brothers John and his brother Patrick Collison (the CEO), Stripe has raised more than $2.2 billion in funding since its inception from investors such as Allianz (through the Allianz X fund), Axa, Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital, General Catalyst, Base Partners, GV and an investor from the founders’ homeland, Ireland’s National Treasury Management Agency (NTMA).
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