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Stripe has retained its entity as a privately owned enterprise over the past ten years, despite persistent speculations about an IPO.
Payment processor Stripe raised $6.5 billion at a $50 billion valuation, the firm announced, with a steep discount from its record valuation of $95 billion in 2021.
According to the press release, the company doesn’t require money for expanding its business. The cash collection, with participation from Andreessen Horowitz, Founders Funds, Goldman Sachs, and Temasek will actually participate in offering liquidity to the present and previous employees along with tax obligations related to the equity awards.
Stripe, which enjoyed the eighth position on CNBC’s Disruptor 50 list has presently cut down its valuation by half from its pinnacle two years ago. The firm created payment processing software for e-commerce companies like Amazon, Google, and Shopify. Goldman Sachs also acted as the sole placement agent while JPMorgan functioned as Stripe’s financial advisor.
One can say that it is an interesting time for Stripe, valuation-wise. This is because two months ago Stripe reduced its internal valuation to $63 Billion. The eleven percent slash came after an internal valuation cut that happened six months ago, which valued the firm at $74 Billion. In between, Stripe also fired fourteen percent of its staff, which constituted more than a thousand people in November.
Stripe has retained its entity as a privately owned enterprise over the past ten years, despite persistent speculations about an IPO. Many news outlets announced in January that the firm was contemplating a decision on a public offering within the next year.
Stripe’s latest Series I round will be non-dilutive, according to the firm. By offering liquidity to present and former employees, the firm will offset the issuance of the round’s new shares. However, the company has maintained its intentions to remain a private business for long.
In an interview in 2021, Stripe co-founder John Collison said that they were very happy as a private company. This was an answer to the rumors about a potential IPO in the same year.
In July, Stripe slashed its internal valuation by twenty-eight percent, a jump from a peak of $95 billion to $74 billion. Subsequently, in January, Stripe again cut down its valuation to $63 billion. The continuous reduction represents the rather surprising pullback in tech stocks last year, which was the most disastrous year for the Nasdaq since 2008.
However, Stripe has also actively supported strong momentum with startups. Founders are creating companies at a historic rate, and Stripe Atlas witnessed a 155% hike in incorporations from 2019 to 2022.