Online payment processing platform Stripe is eyeing an exit within the next 12 months, regardless of how the market looks.
The Wall Street Journal reported last week that the Irish-American payments company and startup founded in 2010 has hired JP Morgan and Goldman Sachs to advise it on either going public or letting its employees cash out their stakes in a private-market transaction.
Patrick and John Collison, Stripe’s brother founders, told their employees they would decide within the next 12 months, the report added. Some of the early workers of Stripe are counting on the firm finding an exit before their stock awards expire this year.
Last July 2021, Stripe filed its intent with the Securities and Exchange Commission to go public. However, like several other private companies, it placed the IPO on hold as the stock market plunged in 2022.
Private investors last valued Stripe at $95 billion in March 2021, making it one of the world’s most valuable fintech companies. Should Stripe decide to go through with an IPO, it is poised to be among the biggest listings in recent years.
Meanwhile, in other news about Stripe, the online payment processing platform is reportedly closing in on a mega $3 billion funding deal with its current advisors that would value it at between $55 billion and $60 billion, according to tech news website The Information.
This raise would be at a sharp discount on the platform’s last funding round in March 2021, which was made at a $95 billion valuation.
This particular move follows Stripe looking at going public in the next 12 months and is designed to help it solve a problem with some of its long-time staff who hold restricted stock due to expire, hitting their compensation, The Information added.
The New York Times also zeroed in on this update. In its recent story, the media outlet said, “It’s perhaps the biggest sign yet that start-ups will have to accept some trade-offs to raise money while the markets remain largely shut to new entrants.”
The publication also made an interpretation about whether others will follow Stripe’s example.
“Not every company is willing to swallow a so-called down-round investment, in which its valuation falls. (Some start-ups are resorting to complicated ways to raise funds while maintaining their lofty valuations, which investors told DealBook could cause headaches later on.),” The New York Times stated. “It’s possible that the markets will open up in the next year, encouraging Stripe and others to pursue stock listings. But start-ups may face a long wait — and turn to valuation-cutting investments to get money in the meantime.”