Stripe In Talks To Raise $2.5B After Lowering Valuation

Stripe is scrambling. 

The payments processing startup from San Francisco is seeking to raise around $2.5 billion, according to The New York Times, which would raise Stripe’s valuation from $55 billion to $60 billion. 

Thrive Capital, which led Stripe’s Series C and contributed to its Series E (according to Crunchbase data), contributed $1 billion to the fundraising efforts per the report. 

Stripe’s raise will likely not go toward bolstering the company’s operations, according to The Wall Street Journal. Instead, the company will use the funds to resolve the expiring stock units held by employees. 

Collapsing under late-stage pressure

Stock options are a crucial tool for tech startups to recruit and retain valuable employees, and several veteran members of Stripe also have stock units that are set to expire this year. Stripe is considering going public or facilitating a private market transaction to allow employees to liquidate those assets. 

Stripe’s next moves could pave the way for other late-stage, high-value companies grappling with the same problems. It’s the fifth-highest valued startup on The Crunchbase Unicorn Board, under Shein, Tiktok owner ByteDance and SpaceX.

The company, which spent the majority of its last 12 years flourishing, is now reckoning with a frosty market. The startup was valued at a high of $95 billion back in March 2021, when the company raised a $600 million Series H round. At the time, co-founder John Collison said he had no plans to take the company public. 

That valuation was, reportedly, later cut down to $74 billion in July and again to $63 billion in January amid a funding pullback. But Stripe’s current reported valuation of $55 billion is still light years ahead of where it was in 2020, when it was valued at $36 billion. 

Illustration: Dom Guzman

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