Stripe raises $6.5B at a massive $50B valuation shortfall

Payments processor Stripe raised $6.5 billion at a valuation of $50 billion, the company said on Wednesday, a sharp discount from its record valuation of $95 billion in 2021.

“This capital is not needed by Stripe to operate its business,” the company said in a press release. Raising cash – with contributions from Andreessen Horowitz, Founders Fund, Goldman Sachsand Temasek – will instead provide liquidity to “current and former employees” and move towards tax obligations associated with equity awards.

Stripe, which ranked eighth on CNBC’s Disruptor 50 list last year, has now seen its valuation nearly halved from its peak two years ago. The company makes payment processing software for e-commerce businesses such as Amazon, Google and Shopify.

Goldman Sachs acted as the sole placement agent, while JP Morgan served as financial advisor to Stripe.

Stripe has been privately owned for over a decade, despite constant speculation about an IPO. CNBC reported in January that the company would decide on a public offering next year.

The company said that Stripe’s latest Series I round will be non-dilutive. The company will offset the round’s issuance of new shares, by providing “liquidity” to current and former employees. But the company has long been convinced that private ownership is optimal.

“We are very happy to be a private company,” Stripe co-founder John Collison told CNBC in 2021. At the time, Collison dismissed rumors of a possible IPO.

In July, Stripe cut its internal valuation by 28% from $95 billion to $74 billion. Then in January, The Information reported that Stripe again reduced its valuation to $63 billion. The decrease mirrors the dramatic decline in tech stocks last year, which was the worst year for the Nasdaq since 2008.

Stripe laid off 14% of its workforce in November because leadership miscalculated how much the internet economy would continue to grow.

Watch: ‘We’re very happy to be a private company,’ says Stripe co-founder