With the market changing so dramatically in 2022, it’s no surprise that many startups are going down right now.

This week alone, it was reported that Varo raised a $50 million equity round led by Warburg Pincus at a “significantly” lower valuation. According to Fintech Business Weeklythe struggling neobank would raise funding at a pre-money valuation of $1.8 billion. That’s less than the $2.5 billion Varo was valued at in September 2021 when it was a massive and “oversubscribed” Series E of $510 million.

The startup celebrated its two-year anniversary last August obtaining the charter from the national bank – a move that made it the first all-digital, nationally chartered US consumer bank. In a interview with australiabusinessblog.com, CEO and founder Colin Walsh emphasized last September that the company “continued to see strong customer growth” and still had “a clear path to profitability.”

australiabusinessblog.com reached out to inquire whether or not Varo has signed a term sheet for another $50 million raise — with Warburg Pincus raising $25 million — but hadn’t heard back as of this writing.

Also this week, The Information reported that payments giant Stripe is still trying to raise capital and is now believed to be targeting a valuation of around $50 billion, or $20 per share, after hitting some hurdles. Earlier this year, australiabusinessblog.com reported that Thrive Capital reportedly committed $1 billion of fresh capital to Stripe as part of a new investment in the works that would have valued the fintech company between $55 billion and $60 billion.

It was initially thought that Stripe was looking to raise $2 billion, but now the number is believed to be closer to $2.5 billion to $3 billion, according to reports from The New York Times And The information. In an unusual twist, Stripe is believed to be raising new funds to, as The Information reported, “address the problem of restricted stock expirations for some of its veteran employees — and a huge tax bill for employees who are likely to be involved.” accompanied.”

The fact that the company could raise money to pay off a tax bill raised eyebrows internally here at australiabusinessblog.com. That’s not typical, and it certainly doesn’t seem like the ideal way to spend investors’ money. Ken Smythe, founder and CEO of Next Round Capital Partners – a capital markets and VC secondary firm – confirmed our impressions.

In a phone interview on Jan. 27, he told me it’s “highly unusual for investors to be excited about another round that will pay mostly unpaid taxes.”

Anyway, the fact that fintech startups – or startups for that matter – are going rounds down isn’t the big news it might have been a year ago. When faced with closing or raising a down round, most startups opt for the latter.