Payment giant Stripe raises $6.5bn, slashes valuation by half

American payment processor firm Stripe has raised $6.5 billion in fresh funding and at same time lowered its valuation to $50 billion, the company said on Wednesday.

– Key points to note

The fresh funds will be applied to meet key obligations running in billions of dollars of tax liabilities linked to its former and current staff’s stock units, according to an official statement.

John Collison, Stripe’s co-founder and current president, said the move to reward its former and current employees is an “opportunity for them to access the value they’ve helped create.”

According to Mr Collison, “the internet economy is still young” and the growth and opportunities in the future could dwarf all past achievements.

“Over the last 12 years, current and former Stripes have helped build foundational economic infrastructure for millions of businesses around the world, and this transaction allows them to access the value they’ve helped create, but the internet economy is still young, and the opportunities of the next 12 years will dwarf those of the recent past. There’s so much to discover and to create. For us, it’s now back to work,” he said.

Stripe, which powers online payments for top e-commerce firms as Amazon and Lyft and Shopify, was valued a5 $95 billion by venture capitalists in March 2021. It was ranked eighth on CNBC’s Disruptor 50 list in 2022.

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The company has remained private despite speculations it plans to go public within a year.

The tech startup’s fund-raising is supported by Andreessen Horowitz, Founders Fund, Goldman Sachs, and Temasek. Other big names in the $6.5 billion funding round include Baillie Gifford, General Catalyst, MSD Partners, and Josh Kushner’s Thrive Capital.

Goldman Sachs served as the sole placement agent while J.P. Morgan served as Stripe’s financial advisor.

In July, Stripe adjusted its internal valuation by 28%, from $95 billion to $74 billion and again lowered it to $63billion in January.

The company laid off 14% of its workforce in November in a reflection of a difficult growth year.