A prominent fintech company is reportedly close to facilitating a significant deal that would allow early investors to cash out. According to Axios, payment processing firm Stripe may let investors who bought into the company 15 years ago sell their shares to the venture capital firm Sequoia Capital. This transaction would value Stripe at $70 billion. Although this valuation is lower than the $95 billion it achieved in 2021, it is still considerably higher than the $50 billion valuation from last year’s fundraising round.
The initial years of the COVID-19 pandemic brought immense optimism for e-commerce firms like Stripe, as the increase in home shopping drove their growth. Stripe, which supports the back-end operations of many e-commerce businesses, expected to benefit significantly and expanded its workforce accordingly. However, the high expectations were tempered by inflation, rising interest rates, and geopolitical challenges such as the war in Ukraine, which have made it more challenging for ambitious private companies to raise funds.
“At the outset of the pandemic in 2020, the world rotated overnight towards ecommerce,” wrote co-founders Patrick and John Collison in a 2022 memo announcing a 14% reduction in the workforce. “We witnessed significantly higher growth rates over the course of 2020 and 2021 compared to what we had seen previously. As an organization, we transitioned into a new operating mode and both our revenue and payment volume have grown more than 3x since… The world is now shifting again. We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding.”
The potential deal from longtime Stripe backer Sequoia Capital would be directed at investors from fundraises between 2009 and 2012. Neither Stripe nor Sequoia has commented publicly on the deal.