In A $6.5 Billion Funding Round, Stripe Cuts Its Valuation To $50 Billion

The payment processing company Stripe has raised $6.5 billion at a valuation of $50 billion, a significant discount to the company's previous record valuation of $95 billion in 2021.

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A press release by Stripe in which the company explained that “it does not require this capital to run its business,” was released today. This cash raise will be used to provide liquidity to "current and former employees" and fulfill the tax obligations associated with equity awards, with contributions coming from Andreessen Horowitz, Founders Fund, Goldman Sachs, and Temasek.

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In relation to the top distributors’ list, Stripe, which ranked eighth on the list last year, has now reduced the market capitalization for the company by almost half from its peak two years ago. There are many online retailers, such as Amazon, Google, and Shopify that use this software to handle payment processing.

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A unique placement agent of Goldman Sachs acted on behalf of Stripe, whereas J.P. Morgan provided Stripe with financial advice on the deal.

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In spite of frequent speculation about an IPO at Stripe over the past decade, the company remains privately owned today. According to a report by Trade Algo, the company is expected to make a decision about a public listing in the coming year, which will be followed by an offering.

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This latest Series I round will not dilute Stripe's existing shareholders, the company informed in a statement. In order to offset the issuance of new shares from the upcoming round, the company will provide "liquidity" to its current and former employees as part of this round. As a matter of fact, the company has maintained for a long time that private ownership is the best option for it.

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In 2021, Stripe co-founder John Collison told Trade Algo that he was very satisfied with the company's growth as a private business. The rumors that Collison was considering an IPO at the time were dismissed at the time by Collison.

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Stripe announced that its internal valuation dropped from $95 billion to 74 billion in July, representing a reduction of 28%. As reported in Trade Algo in January, Stripe had again lowered its valuation to $63 billion in its latest round of stock market valuations. There was a dramatic decline in tech stocks last year, the worst year for the Nasdaq index since 2008, which is a reflection of the dramatic decline in tech stocks during last year.

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There was a huge layoff of 14% of Stripe workers in November because the company's leadership acknowledged they had underestimated the growth of the internet economy for many years to come.