Stripe Slashes Valuation of $55B Funding Campaign

Stripe has lowered the valuation of its $55 billion fundraise by around 10%.

The reduction was reported late Tuesday (Feb. 28) by The Information, which notes that the payments processing company has faced troubles in obtaining the funding at a time when finding investments is already difficult.

Sources tell the news outlet that although Stripe is still expected to get funded, it has reduced its per share price from $23 a share to around $20, bringing the valuation to $50 billion. Stripe had been valued at $95 billion in 2021, following a $600 million funding round.

A Stripe spokesperson declined to comment Wednesday (March 1) when reached by PYMNTS.

The Information report says that some investors consider the valuation too high and would only invest if it were brought down.

Stripe has apparently reduced its internal valuation three times since last year, with the most recent cut — 11%, — happening in January. The company also slashed its internal valuation by 28% in June 2022. A smaller cut came in October, amounting to a 40% reduction over six months.

The lower internal price— known as a 409a valuation— is different from the valuation determined by investors and can help employees by reducing the cost of their equity in the company.

Based in Dublin, Ireland, Stripe processes eCommerce payments, and saw its fortunes rise during the pandemic-fueled online shopping explosion. More than 200,000 companies signed on with Stripe between the onset of the pandemic of 2020 and early 2021, with Stripe processing more than 5,000 requests a second in 2020.

However, as PYMNTS has noted, some investors questioned the sustainability of high tech company valuations, as inflation was rising and shaking up the American bond market.

Last month brought the news that Stripe expects to process $1 trillion in payment volume for 2023, up from $800 billion in 2022. It would mean that Stripe reached the $1 trillion milestone in about 13 years, a feat that PayPal — which hit $1 trillion in 2021 — took 23 years to reach.

Stripe’s payment volume rose 25% in 2022 after seeing growth of 60% in 2021 — a slowdown reflecting an overall drag on eCommerce growth after COVID restrictions ended.

Aside from the $1 trillion landmark, Stripe has recorded some other wins recently, as PYMNTS has reported. In January, the company said BMW of North America had chosen it as its primary payments infrastructure, handling the automaker’s U.S. vehicle preorders and online purchases of things like maintenance and extended warranties.

Also in January, Amazon and Stripe formed an agreement that marked a major expansion of the eCommerce giant’s use of the payments platform.