When payment giant Stripe raised $600 million With a valuation of $95 billion in 2021, it made headlines for raising capital at the highest valuation ever for a private startup.
Defending that assessment appears to be a challenge. The fintech company has reportedly approached investors to raise more capital, at least $2 billion, at a valuation of $55 billion to $60 billion. According to the Wall Street Journal, Stripe would not use the money for operating expenses, but rather to cover a large annual tax bill associated with employee stock units. It is not clear if there are ongoing discussions.
That information came to light the same day as Stripe was said to have told employees that it had establish a term of 12 months by himself to go public or carry out a transaction in the private market.
TechCrunch reached out to Stripe for comment but had not heard back as of press time.
The news comes after several months of apparent problems at Stripe. In November, he fired 14% of his staff, or about 1,120 people, saying that there were ‘Overcontracted for the world we’re in. And the company has cut its internal valuation more than once in the past year. Earlier this month, TechCrunch reported that Stripe had Cut your internal rating to $63 billion. That 11% cut came after an internal valuation. cut that occurred six months above, which valued the company at $74 billion.
Raising more capital at a valuation of $55 billion to $60 billion would certainly be characterized as a negative round, but Stripe would hardly be the first big fintech to do so. European giant and BNPL Klarna raised $800m last year at a valuation of $6.7bn, a drop of 85% compared to the $45.6bn it was valued at in June 2021.
In 2021, Stripe reportedly had gross revenue of $12 billion and was profitable on EBITDA, according to Forbes. The company’s products, in its own words, power payments for online and in-person retailers, subscription companies, software platforms and marketplaces, “and everything in between.” It has not publicly disclosed revenue figures since 2021.
Stripe is one of many high-value fintech start-ups that have run into roadblocks of late. In December, decacorn fired cadres 260 employees, or about 20% of its workforce, saying it had “hired and invested ahead of revenue growth.”
Notably, the two companies had a bit of a public spat last year, despite being partners, when Stripe filed in May a new product, Financial Connections. That new product was designed to give Stripe customers a way to connect directly to their customers’ bank accounts, to access financial data to speed up or execute certain types of transactions, exactly what Plaid has historically done. Plaid came to light months later, revealing his own push payments.
Founded by Irish brothers John and his brother Patrick Collison (CEO), Stripe has raised more than $2.2 billion in funding since its inception from investors including Allianz, through its Allianz X fund, Axa, Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital. , General Catalyst, Base Partners, GV and an investor from the founders’ home country, the National Treasury Management Agency of Ireland (NTMA).
