A major fintech company may soon allow early investors to cash out in a significant transaction. Reports from Axios indicate that payment processor Stripe is considering offering its early investors the opportunity to sell their shares to venture capital fund Sequoia Capital. This deal would value Stripe at $70 billion, a figure that is lower than the $95 billion valuation Stripe achieved in 2021 but much 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 increasingly shopped from home. Stripe, which supports the back-end operations of many e-commerce companies, anticipated benefiting from this trend and expanded accordingly. However, these high expectations diminished as inflation, rising interest rates, and new geopolitical challenges, including the war in Ukraine, affected growth-minded companies’ ability 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 target investors who participated in the funding rounds between 2009 and 2012. Neither Stripe nor Sequoia has publicly commented on the potential deal.