Stripe, a prominent fintech company, might soon allow early investors to cash out in a significant deal. According to Axios, the payment processor may enable investors who bought into the company 15 years ago to sell their shares to Sequoia Capital, a venture capital fund, in a transaction valuing Stripe at $70 billion. Although this valuation is lower than the $95 billion Stripe achieved in 2021, it is substantially higher than the $50 billion valuation from last year’s fundraising round.
The initial years of the COVID-19 pandemic generated substantial optimism for e-commerce companies like Stripe as consumer online shopping surged. Stripe, which supports the backend operations of many e-commerce businesses, anticipated benefitting from this trend and expanded its workforce accordingly. However, these high expectations were tempered by rising inflation, higher interest rates, and geopolitical challenges such as the war in Ukraine, which complicated fundraising efforts for growth-focused private companies.
“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 the layoffs of 14% of 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 Sequoia, a longtime backer of Square, would be directed at investors who participated in fundraises between 2009 and 2012. Neither Stripe nor Sequoia have publicly commented on the potential deal.