Stripe, a leading Fintech in the payments and transaction sector, has raised $6.5 billion (€6.15 billion) at a $50 billion (€47 billion) valuation.
The “Series I” round took a significant haircut from its last round. In 2022, Stripe raised money at a $74 billion valuation. Before that, Stripe raised funding at a $95 billion valuation so the company has effectively been slashed in half.
While the valuation may have dropped, this is similar to what other venture-backed firms are experiencing in a difficult economy. Taking money today can help guarantee a successful future at a larger valuation.
Existing investors Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital participated alongside new investors GIC, Goldman Sachs Asset and Wealth Management, and Temasek.
The company said the new money will be used to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards, resulting in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors.
Stripe stated that it does not need the capital to run its business.
Stripe co-founder and President John Collison said the round provides shareholders with an opportunity to access the value they have helped to create while adding that the digital economy is still young and future opportunities will “dwarf” those of the recent past.
Josh Kushner, founder and CEO of Thrive Capital, said that Stripe is “indexed to secular trends” which will compound for decades.
“… the growth of the internet economy and the trajectories of the world’s most innovative and forward-looking companies. Stripe will continue to be at the epicenter of every new technology current, and is the de facto choice for the businesses and builders that are creating the future. This is why we first invested in Stripe in 2014, and why we are proud to deepen our partnership.”
Stripe reported that more than a hundred businesses now handle more than $1 billion on Stripe every year. Beyond payments Srtip also provides services like tax, billing, issuing, along with Banking as a Service. Stripe, one of the most successful Fintechs of all time, has morphed into an e-commerce enabler to a one stop shop for all types of neo-banking and digital transaction management.