A major fintech player might soon allow early investors to cash out in a significant transaction. Reports from Axios suggest that payment processor Stripe is considering a deal where investors who bought into the company 15 years ago could sell their shares to venture capital firm Sequoia Capital. This deal would value Stripe at $70 billion. This offer is below the $95 billion valuation Stripe obtained in 2021, but still much higher than the $50 billion valuation from last year’s fundraising round.
The early phase of the COVID-19 pandemic brought a surge of optimism for e-commerce companies like Stripe, as consumers increasingly turned to online shopping. Stripe, which supports the back-end operations of many e-commerce companies, ramped up its hiring in anticipation of benefiting from this growth. However, these high hopes were tempered by rising inflation and interest rates, alongside new geopolitical challenges such as the war in Ukraine. These factors have made it difficult for private companies focused on growth to secure funding.
“In the early days of the pandemic in 2020, the world quickly shifted towards e-commerce,” co-founders Patrick and John Collison wrote in a 2022 memo announcing a 14% reduction in the company’s workforce. “We experienced significantly higher growth rates through 2020 and 2021 compared to prior years. Our organization transitioned to a new operating mode, with both our revenue and payment volumes growing more than threefold. However, the world is shifting once again, as we face persistent inflation, energy shocks, higher interest rates, reduced investment budgets, and fewer funding opportunities for startups.”
According to Axios, the offer from longtime Stripe backer Sequoia would be available to investors who participated in fundraising rounds between 2009 and 2012. Neither Stripe nor Sequoia have publicly commented on the potential deal.