Digital payment company Stripe announced Wednesday it has raised $6.5 billion in a series I funding round to put its valuation at $50 billion. The company was expected to raise around $2 billion.
The new valuation comes a few months after Stripe laid off about 1,200 employees in a move to cut costs.
GIC, Goldman Sachs Asset and Wealth Management and Temasek are among new investors in the round. They teamed up with existing investors Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners and Thrive Capital.
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The payment processing giant said the new funds 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.”
Stripe has grown from a single tool-code for developers, tax and other fintech tools to a giant in the payment industry since it was founded in 2010. The company has onboarded other services including cryptocurrency and Buy Now Pay Later that it partnered with Affirm late last year to integrate. It recently went into partnership with OpenAI and has set a 12-month deadline for an IPO decision.
Two months ago, Stripe cut its internal valuation to $63 billion. TechCrunch reported that the 11% cut came after an internal valuation cut that occurred six months prior, which valued the company at $74 billion.
Forbes estimates that with its current valuation, the Collison brothers, who still run the company, are now worth $5.5 billion with 11% stake each, down from $9.5 billion at Stripe’s peak valuation in 2021.
The valuation reduction came as part of broader market correction in the tech industry. Stripe has cut its valuation internally on at least three occasions, reducing it from $95 billion where it was two years ago, to $63 billion early this year. The company said in a press statement that it does not need the new funding to run its business.
Stripe said last year that all those affected by the November 2022 lay off will be given at least 14 weeks’ worth of pay, although it will depend on the time they served at the company. Also, the company will pay the full 2022 annual bonus, though it will be prorated if any member of the laid workforce joined last year.