Stripe May Go Public Next Year To Address Expiring Shares

Payments startup Stripe told employees and investors it will make a plan to go public next year, The Information reported on Thursday.

Stripe has been arguably one of the most anticipated IPOs of 2023, making several end-of-the-year lists (including ours). It was also one of the highest-valued decacorns in 2022. And yet, when the company was valued at $95 billion in 2021, Stripe co-founder John Collison said there were no immediate plans to take the company public.

But it looks like his tune has changed. The company is looking to solve the issue of 10-year stock units awarded to veteran employees that are expected to expire at the end of this year. It’s an issue several companies Stripe’s size will face as the IPO market all but closed up in 2022.

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One way for Stripe to resolve the issue is to take the decacorn public. Founded in 2010, the company has raised around $2.2 billion since then — most recently a $600 million Series H in 2021. It has dual headquarters, in San Francisco and in Dublin, Ireland.

Looking at the secondary market

The other option Stripe may be considering is allowing stockholders to sell shares on the secondary markets.

As an employee retention tool, it’s unclear what the best picture is for Stripe, which has operated privately for 13 years. According to data from secondary markets platform Forge Global, almost half of the investor activity on its platform in 2020 was around companies that were 10 years or older. In Q4 of last year, that interest nosedived to 8% — the lowest recorded on Forge.

That’s pretty surprising, considering that the majority of tech company activity on the secondary markets are centered around established, pre-IPO dinosaurs such as Stripe. But given the state of overhyped valuations and the frosty market, perhaps investors are hesitant to buy shares.