In a strategic move, Sequoia Capital has reportedly extended an offer to its investors to buy shares in Stripe, a leading payments company it initially supported nearly 14 years ago, according to a report from Axios.
This morning, Sequoia contacted Limited Partners (LPs) in its 2009 to 2012 funds, proposing to purchase up to $861m worth of Stripe shares. These shares would be acquired by other, newer Sequoia funds—a possibility facilitated by the company’s restructuring in 2021.
The offer price is pegged at $27.51 per share, which is the current 409A valuation of Stripe, valuing the company at $70bn. This is a significant adjustment from its 2021 valuation of $95bn, which was later revised down to $50bn the following summer.
Interestingly, the selling LPs would not incur carried interest charges, and Sequoia partners would not gain from these transactions unless they personally invested in the involved funds and opted to sell their stakes. The shares on offer represent about 10% of Sequoia’s total Fair Market Value (FMV) of Stripe shares, with a decision deadline set for August 14.
In its communication to LPs, Sequoia lauded Stripe’s resilience through economic cycles, its role in accelerating direct revenue for clients, and its utility to both small and large enterprises. Stripe reported handling over $1trn in payments in 2023, marking a 25% increase from the previous year, while Sequoia distributed approximately $10bn to its investors last year.
Stripe operates as a crucial financial infrastructure platform for businesses, supporting a wide range from large enterprises to dynamic startups. Based in San Francisco and Dublin, Stripe’s mission is to boost the GDP of the internet. It provides an integrated suite of financial and payments products, helping businesses reduce costs, enhance revenue, and operate more efficiently. Stripe’s platform supports all aspects of payment handling, revenue management, and the development of new business models.
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