Fintech startup Stripe has set itself a 12-month deadline to go public, either through a direct listing or by pursuing a private market transaction such as a fundraiser and bid, according to sources familiar with the case. The news, as first reported by the Wall Street Journalcomes as a surprise given the rather dry public market activity in the tech world.
Stripe declined to comment on the record about its deadline or current earnings.
The payments giant was founded in 2010, so it’s not entirely surprising that it’s exploring avenues for exit. However, Stripe, which was recently publicly valued at $95 billion, has not been immune to the global downturn. In November, it laid off 14% of its staff, or about 1,120 people. And the company has downgraded its internal valuation more than once in the past year. Earlier this month, londonbusinessblog.com reported that Stripe had lowered its internal valuation to $63 billion. That 11% cut came after an internal valuation cut that took place six months earlier, valuing the company at $74 billion.
According to the Journal, Stripe hired Goldman Sachs and JP Morgan to help evaluate which course of action makes the most sense for the company.
Founded by Irish brothers John and his brother Patrick Collison (the CEO), Stripe last raised venture capital in March 2021 – a $600 million round that earned it that lofty $95 billion valuation. That funding included support from two major insurance players. Allianz, through its Allianz X fund, and Axa participated in the round, along with Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital and an investor from the founders’ home country, Ireland’s National Treasury Management Agency (NTMA).
Stripe reportedly grossed $12 billion in gross sales and was EBITDA profitable in 2021, according to Forbes. The company’s products, in its own words, enable payments for online and in-person retailers, subscription companies, software platforms and marketplaces, “and everything in between.”
Late-stage tech companies have largely avoided going public for the past year because of the general volatility hammering stocks. Has Stripe missed its chance to go public, or is it kicking off a trend that will be followed by other behemoths in the space? Guess that’s what it’s trying to figure out.
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