Digital payments company Stripe has announced that it has raised over $6.5 billion in Series I funding, valuing the company at $50 billion. This funding round saw the participation of new investors like GIC, Goldman Sachs Asset and Wealth Management, and Temasek, who joined existing investors such as Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital. This is one of the largest funding rounds in the history of the payments industry.
A Lower Funding Amount Than Expected, But A Lower Valuation Too
Earlier this month, it was reported that Stripe was expected to raise a lower amount of funding, around $2 billion, but at a valuation of $60 billion. More recently, Stripe was publicly valued at $95 billion. This series I funding round came at a $50 billion valuation, which is significantly lower than the previous valuations.
Use of Proceeds for Employee Liquidity and Tax Obligations
Stripe has stated that it intends to use the proceeds from the funding round to provide liquidity to current and former employees and address employee withholding tax obligations related to equity awards. This will result in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. The company also noted that it does not need this capital to run its business.
Valuation Fluctuations and Layoffs
Stripe’s valuation has been fluctuating over the past few months. Two months ago, it was reported that Stripe had cut its internal valuation to $63 billion. This came after an internal valuation cut that occurred six months prior, which valued the company at $74 billion. In between, Stripe laid off 14% of its staff, or around 1,120 people, in November. However, despite these fluctuations, Stripe remains one of the most valuable private companies in the world.
Future Plans and Expansion
With this new funding, Stripe is expected to expand its operations globally and invest in new technologies to improve its payment platform. The company is also expected to focus on increasing its market share in the e-commerce space, where it already has a strong presence.
In conclusion, Stripe’s latest funding round has raised over $6.5 billion and valued the company at $50 billion. This funding round will be used to provide liquidity to employees and address tax obligations related to equity awards. Despite fluctuations in its valuation and layoffs, Stripe remains one of the most valuable private companies globally and is expected to continue expanding its operations and investing in new technologies.