Wall Street Journal reported that executives of the company set a goal of either taking the company public or enabling employees to sell shares in a private-market transaction within the above mentioned timeframe. As per information offered to the publication by people that are familiar with the matter, the two investment banks are set to advise Stripe on both options.
A payments processor for internet companies of the likes of Shopify and Instacart, Stripe has preferred staying private and disclosing fewer details to outsiders regarding its performance. Due to this, throughout the years, a pent-up demand for investors was created, with them clamouring to own part of Stripe, but not having the chance to do so.
However, over the past year, rising interest rates, inflation, and fears of a recession contributed to an extensive selloff in tech stocks, predominantly those of recently public companies, and caused and increased number of startups to shelve their plans for going public.
Stripe’s last fundraising from March 2021 valued the company at USD 95 billion. As per details provided in the announcement, more recently, the company approached investors of the likes of Berkshire Hathaway in regard to raising a minimum of USD 2 billion in fresh cash at a valuation of USD 55 billion to USD 60 billion. The funding would have been used to cover a large tax bill associated with some employee stock units, however no information on whether the talks are still active was provided.
As stated by the Wall Street Journal, a Stripe stock-market could help revive an initial public offering market that went dormant in 2022. According to Dealogic, as per information provided in the announcement, traditional IPOS in the US had an increase of USD 8.6 billion in 2022, a decrease from all other years throughout the past two decades.
Following the COVID-19 pandemic, the increase in ecommerce boosted Stripe’s business, with their 2020 annual revenue having grown approximately 70% to around USD 7.4 billion, whereas the March 2021 fundraising helped Stripe become one of the world’s most valuable statups.
However, consumers’ return to in-store shopping and the change in their spending patterns in the face of high inflation brought forth challenges.
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