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Stripe will allow its employees to cash out about $1bn of stock at a valuation 30 per cent higher than last year, as the payments processing group continues to put off going public amid uncertainty in global markets.
Investors including Goldman Sachs’ growth equity fund and Sequoia Capital will acquire the employee shares as part of a tender offer announced on Wednesday. The sale is also being supported by a small amount of capital from Stripe’s own balance sheet.
The deal values Stripe at $65bn, which is higher than its $50bn valuation a year ago — but far below its peak value of $95bn in 2021.
Having soared in the boom times, the company is now regarded as an industry bellwether. The extent of its valuation decline since 2021 and likelihood that it will delay an initial public offering into next year has set a marker for other late-stage start-ups that will need to raise funds this year.
Stripe carried out one of the largest private stock sales in US history last year, accepting a big discount to secure new funds. It raised $6.5bn from investors including Peter Thiel’s Founders Fund, Josh Kushner’s Thrive Capital and Andreessen Horowitz, which allowed it to pay billions of dollars of tax liabilities associated with employees’ stock units.
The latest share sale means Stripe staff can access liquidity despite the company’s delay in pursuing an IPO that was first discussed years ago. Public listings for tech companies have been largely paused as valuations have whipsawed and interest rates have risen, pushing investors away from riskier investments.
A series of large private tech start-ups have arranged stock deals for their employees in the past few months, including ChatGPT-maker OpenAI, design software developer Canva and Elon Musk’s SpaceX.
“We’re pleased to once again offer employees an opportunity for liquidity,” said Stripe chief financial officer Steffan Tomlinson. “Our business continues to see strong momentum with the most advanced companies in the world.”
Stripe, which is based in San Francisco and Dublin, was Silicon Valley’s most feted start-up as it rode frothy private markets to secure investments from top venture funds. It has been expanding its core payments business from tech companies such as Shopify and Instacart to retailers that have increased their online sales during the pandemic, including Best Buy and Zara.
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