Stripe Aims to Buy Employee Shares and Cover $3.5 Billion Tax Bill

Stripe’s latest fundraising round is reportedly being driven by a $3.5 billion tax bill.

The firm aims to cover this personal tax liability that will soon be faced by some of its longtime employees, whose shares will expire unless they are allowed to sell them, but who will then be taxed on those shares, Bloomberg reported Monday (March 6).

Stripe also wants to organize a tender offer to enable those employees to sell some of their shares, and plans to use $600 million of the amount it raises for that reason, according to the report.

A Stripe spokesperson told PYMNTS that the company had no comment on this report.

The company’s push to raise funds started in January and has been driven by these needs — not by any need to raise cash for its normal business operations, according to the report.

It was reported March 1 that Stripe had reduced its per share price from $23 a share to around $20, bringing the company’s valuation down to $50 billion after having been valued at $95 billion in 2021 after a $600 million funding round.

About a week before that, in a funding round that would value the company at $55 billion before the infusion of capital, Stripe was reportedly working with banks to make an offering through a special vehicle for investment that is devoted to Stripe, gives access to wealthy investors before the company goes public, and allows the company to remain private for a longer period of time.

In Monday’s report, Bloomberg also said that Stripe processed $816 billion in payments volume in 2022, generated $14.3 billion in revenue by doing so and wins about 44% of the new business for which it competes — with just 9% going to a competitor and the other 47% being cases in which the prospect made no change or in which the outcome is not known.

“Secular market-share trends favor Stripe and other tech-forward competitors,” Stripe said in a presentation handed out to potential investors and viewed by Bloomberg News. “Payments growth is not a zero-sum game.”