A major fintech company may soon allow early investors to cash out in a substantial transaction. According to Axios, payment processor Stripe is likely to permit investors who bought into the company 15 years ago to sell their shares to venture capital firm Sequoia Capital. The deal would value Stripe at $70 billion. While this is lower than the $95 billion valuation Stripe received in 2021, it is significantly higher than the $50 billion valuation from a fundraising round last year.
The early years of the COVID-19 pandemic generated significant optimism for e-commerce companies like Stripe, as consumer shopping shifted heavily towards online platforms. Consequently, Stripe, which provides backend services to many e-commerce companies, anticipated considerable benefits and expanded its workforce accordingly. However, these optimistic expectations have been tempered by rising inflation, high-interest rates, and new geopolitical challenges, such as the war in Ukraine, which have complicated fundraising efforts for growth-oriented private companies.
“In 2020, the world rapidly pivoted towards e-commerce,” co-founders Patrick and John Collison wrote in a 2022 memo announcing that 14% of the company’s workforce would be laid off. “We witnessed significantly higher growth rates in 2020 and 2021 compared to previous years. As an organization, we shifted to a new operating mode, with both our revenue and payment volume growing more than threefold. However, the global situation is changing again. We are now facing persistent inflation, energy disruptions, higher interest rates, reduced investment budgets, and more limited startup funding.”
According to Axios, the offer from longstanding investor Sequoia would be extended to those who participated in financing rounds between 2009 and 2012. Neither Stripe nor Sequoia has publicly commented on the potential deal.