FinTech giant Stripe raises $6.5bn but suffers another valuation drop

FinTech giant Stripe raises $6.5bn but suffers another valuation drop

FinTech giant Stripe has seen its valuation slashed again, following the close of a colossal funding round of $6.5bn.

This investment puts Stripe’s valuation at $50bn, which is nearly half of its peak valuation of $95bn in 2021.

The FinTech giant has seen its valuation on a steady decline since 2021. It initially dropped from $95bn to $74bn in July 2022. Six months later it dropped by a further 11%, going down to $63bn.

Stripe raised the new $6.5bn capital for its Series I funding round. Primary investors of the round were Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners and Thrive Capital.

Existing Stripe investors, GIC, Goldman Sachs Asset and Wealth Management, and Temasek, also participated in the Series I.

This capital injection 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. It added that it does not need this capital to run its business.

Commenting on the funding round, Stripe co-founder and president John Collison said, “Over the last 12 years, current and former Stripes have helped build foundational economic infrastructure for millions of businesses around the world, and this transaction gives them the opportunity to access the value they’ve helped create.

“But the internet economy is still young, and the opportunities of the next 12 years will dwarf those of the recent past. There’s so much to discover and to create. For us, it’s now back to work.”

Stripe stated that as transitional businesses continue to move online, its enterprise user base has compounded since 2019. Its clients include Amazon, Ford, Salesforce, BMW, and Maersk.

Goldman Sachs served as sole placement agent on the transaction.

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