A major fintech player may soon offer early investors a significant cashing out opportunity. According to Axios, payment processor Stripe is reportedly about to allow those who invested in the company 15 years ago to sell their shares to the venture capital firm Sequoia Capital in a deal valuing the company at $70 billion. Although this valuation is lower than Stripe’s $95 billion valuation in 2021, it is significantly higher than the $50 billion valuation from last year’s fundraising round.
The early years of the COVID-19 pandemic generated considerable optimism for e-commerce companies like Stripe, as consumers increased their online shopping. Stripe, which supports the back-end operations of many e-commerce companies, expected to benefit significantly and expanded its workforce accordingly. However, these high expectations were tempered by rising inflation, high interest rates, and new geopolitical challenges, such as the war in Ukraine, making it more difficult for growth-oriented private companies to secure funding.
“At the outset of the pandemic in 2020, the world rotated overnight towards e-commerce,” co-founders Patrick and John Collison wrote in a 2022 memo announcing a 14% reduction in the company’s 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 since grown more than 3x… The world is now shifting again. We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding.”
The offer from longtime Stripe backer Sequoia, according to Axios, would be extended to investors who participated in funding rounds between 2009 and 2012. Neither Stripe nor Sequoia have publicly commented on the potential deal.