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The Stripe stock market debut is not expected to be consummated this year, and while the firms see no need to raise funds through an IPO, the sources noted that these plans may change in the near term.
Irish-American payment startup and software as a service company Stripe is making plans to make a grand stock market debut according to a Reuters report. Citing two sources familiar with the matter, Reuters said Stripe has employed the services of a Law firm, Cleary Gottlieb Steen & Hamilton LLP to assist with the process that will usher the startup into the public bourse.
As a privately held entity, the core details about Stripe’s business are not really out there for public consumption. However, the firm is valued at $95 billion following a $600 million funding round in March. At its current capitalization, Stripe is on track to surpass the $200 billion valuations of Ant Group and ByteDance, to become the most valuable startup on record.
The direct listing option being mulled by the firm was such that was adopted by Coinbase Global Inc (NASDAQ: COIN), America’s most valuable cryptocurrency exchange. This route gives good leverage to the company’s existing shareholders to sell their shares directly to new investors through a private tender offer.
As an 11-year old company, Stripe has grown its business and expanded to over 42 countries. Expansion into new markets including Brazil, India, Indonesia, Thailand, and the United Arab Emirates is in the works according to Freightwaves. Per the Reuters listing report, the stock market debut is not expected to be consummated this year, and while the firms see no need to raise funds through an IPO, the sources noted that these plans may change in the near term.
Stripe as a Payment Startup: Business and Backers
Stripe was founded by Irish brothers, Patrick and John Collison in 2010. Since its inception, the firm has conducted as much as 15 funding rounds, securing as much as $2.2 billion from investors including Elon Musk, Allianz X, Axa, Baillie Gifford, Fidelity Management & Research Co., Sequoia Capital, and Ireland’s National Treasury Management Agency (NTMA).
The startup processes hundreds of billions of dollars in payments annually. While its major competitors are industry giants including Paypal Holdings Inc (NASDAQ: PYPL), and Square Inc (NYSE: SQ), Stripe has been able to secure major clients including Amazon.com Inc (NASDAQ: AMZN), Alphabet Inc (NASDAQ: GOOGL), and Zoom Video Communications Inc (NASDAQ: ZM) amongst others.
The plans to seek a public market listing will mark a new milestone for the company, pitching it in line with its competitors in terms of backing from more mainstream investors. The US IPO market has blossomed in a remarkable way this year, picking up pace from the growth trend of last year. Per indications, Stripe may unseat many of its predecessors in market capitalization upon listing, reaffirming its strides amidst positive investor sentiments.