FinTech startup Stripe in advanced talks to raise $4 billion from investors, sources

Fintech giant Stripe is very close to raising $4 billion in fresh funding that will push the company’s valuation to about $55 billion, Reuters reported, citing people familiar with the matter. The new valuation will still be about $40 billion less than the $95 billion the company was valued at in early 2021.

The news comes just about a month after the digital payments processor set a one-year deadline to become a public company.

According to the report, the latest fundraising from high-profile investors including Thrive Capital could be the largest private funding round in recent memory. The sources told Reuters the funding is expected to be completed by the end of March, however, cautioned that the target number could still fall short.

On the economic front, Stripe has not been immune to the ongoing global slowdown. Just a year ago, Stripe became the most valuable U.S. startup, with a valuation of $95 billion. However, the company reportedly lowered its internal valuation to $63 billion amid economic uncertainty, according to The Wall Street Journal. The 12-year-old has enlisted the help of Goldman Sachs and JP Morgan to decide the best course of action for its public listing.

However, Reuters also reported that Stripe may not follow through with the IPO planned for this year “as the latest fundraise would cover a forthcoming tax bill,” Reuters wrote. Stripe also needs to find a replacement for Dhivya Suryadevara, its chief financial officer who announced her departure earlier this month, the sources told Reuters, requesting anonymity as the discussions are confidential.

Meanwhile, as we reported back in November, Stripe laid off 14% of its staff amid rising inflation and fears of a looming recession. In a memo to staff, CEO Collison said the cuts were inevitable as rising inflation, fears of a looming recession, higher interest rates, energy shocks, tighter investment budgets, and lack of funding forced the company to make the tough decision.

“The world is now shifting again. We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding. (Tech company earnings last week provided lots of examples of changing circumstances.) On Tuesday, a former Treasury Secretary said that the US faces “as complex a set of macroeconomic challenges as at any time in 75 years”, and many parts of the developed world appear to be headed for recession. We think that 2022 represents the beginning of a different economic climate,” Collison said.

Founded in 2010 by two Irish brothers Patrick Collison and John Collison, The San Francisco-based Stripe software platform was launched to compete directly with PayPal, Adyen, and Square. The company allows businesses to accept online payments. Today, Stripe is now one of the most valuable fintech startups in the world. Patrick and John Collison, who are 32 and 30 respectively, are each worth over $11 billion.