Stripe raises new funding that values it at $50 billion
Payment processing startup was valued at $95 billion in 2021, but deals with private companies have been hurt by declining global economic conditions.
< p class="css-at9mc1 evys1bk0">Stripe, a San Francisco payments provider and one of the world's most valuable private companies, said Wednesday it had raised new funds that valued it at $50 billion, up from $95 billion in 2021, in a sign of how the air has gone out of start-up trading.The startup, which provides payment processing software to companies like Amazon, has raised $6.5 billion in new funding from investors including Andreessen Horowitz, Founders Fund and Thrive Capital. Stripe, which said it doesn't need the money to run its business, plans to use the funding to help employees sell stock in their company and cover taxes related to their stock compensation.
"Current and former Stripes have helped build fundamental economic infrastructure for millions of businesses around the world, and this transaction gives them the opportunity to access value that they helped create,” said John Collison, Founder and Chairman of Stripe. up. Over the past year or so, as interest rates and inflation rose and the global economy began to ease, seed funding - which had been fueled by low interest rates and cheap money - decreased. Many start-ups have made massive layoffs and cut other costs. Last year, investment in US start-ups fell 31% to $238 billion, according to PitchBook.
Stripe has long been a darling of the start-up industry. In 2021, it reached a valuation of $95 billion after new funding, making it the most valuable startup in the United States. But as conditions deteriorated last year, Stripe lowered its internal valuation by 28% to $74 billion and laid off 14% of its employees, or about 1,100 jobs. The company explored a possible initial public offering of shares earlier this year.
More recently, the start-up ecosystem has been further shaken by the failure of Silicon Valley Bank, a key banking institution for venture capitalists and private companies. Federal regulators took over the bank, which has a new chief executive, Tim Mayopoulos, an attorney who has led several banking and financial technology organizations through difficult times.
"They needed cash at a bad time in the market," Angela Lee, a venture capital professor at Columbia Business School, said of Stripe. future valuations. If their valuation can be halved, then everyone else's can too. Stripe was founded in 2010 by brothers John and Patrick Collison. It has previously raised more than $2 billion from investors.
The new funding gives Stripe breathing room in a tough market for public listings and helps also retain employees. Many private tech companies use stock options to recruit workers, but a quiet public offering market has made it difficult for employees to withdraw those shares. Some Stripe employees have equity awards that will begin to expire next year, for which the new funding will help provide liquidity.
Payment processing startup was valued at $95 billion in 2021, but deals with private companies have been hurt by declining global economic conditions.
< p class="css-at9mc1 evys1bk0">Stripe, a San Francisco payments provider and one of the world's most valuable private companies, said Wednesday it had raised new funds that valued it at $50 billion, up from $95 billion in 2021, in a sign of how the air has gone out of start-up trading.The startup, which provides payment processing software to companies like Amazon, has raised $6.5 billion in new funding from investors including Andreessen Horowitz, Founders Fund and Thrive Capital. Stripe, which said it doesn't need the money to run its business, plans to use the funding to help employees sell stock in their company and cover taxes related to their stock compensation.
"Current and former Stripes have helped build fundamental economic infrastructure for millions of businesses around the world, and this transaction gives them the opportunity to access value that they helped create,” said John Collison, Founder and Chairman of Stripe. up. Over the past year or so, as interest rates and inflation rose and the global economy began to ease, seed funding - which had been fueled by low interest rates and cheap money - decreased. Many start-ups have made massive layoffs and cut other costs. Last year, investment in US start-ups fell 31% to $238 billion, according to PitchBook.
Stripe has long been a darling of the start-up industry. In 2021, it reached a valuation of $95 billion after new funding, making it the most valuable startup in the United States. But as conditions deteriorated last year, Stripe lowered its internal valuation by 28% to $74 billion and laid off 14% of its employees, or about 1,100 jobs. The company explored a possible initial public offering of shares earlier this year.
More recently, the start-up ecosystem has been further shaken by the failure of Silicon Valley Bank, a key banking institution for venture capitalists and private companies. Federal regulators took over the bank, which has a new chief executive, Tim Mayopoulos, an attorney who has led several banking and financial technology organizations through difficult times.
"They needed cash at a bad time in the market," Angela Lee, a venture capital professor at Columbia Business School, said of Stripe. future valuations. If their valuation can be halved, then everyone else's can too. Stripe was founded in 2010 by brothers John and Patrick Collison. It has previously raised more than $2 billion from investors.
The new funding gives Stripe breathing room in a tough market for public listings and helps also retain employees. Many private tech companies use stock options to recruit workers, but a quiet public offering market has made it difficult for employees to withdraw those shares. Some Stripe employees have equity awards that will begin to expire next year, for which the new funding will help provide liquidity.
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