Stripe said on Friday it had raised $694.2 million in the tender offer it had announced in February, when it agreed to let employees sell some of their shares in a deal that valued the fintech giant at $65 billion.
The deal, which gave Stripe a 30 per cent higher valuation than last year, marked a rare bright spot in an otherwise subdued venture capital market, where investors spooked by high interest rates have been cautious despite expectations of a soft landing for the economy.
Global venture capital investments fell to a near five-year low in the first three months of 2024, according to data from PitchBook.
Stripe will use the funds to provide liquidity to its employees. Stock-based payouts typically comprise a big chunk of the compensation for startup employees, who have no way of converting their shares into cash unless their employer files for an IPO or buys back their shares.
Investors have been keenly waiting for years for Stripe’s initial public offering. But analysts say the tender offer could potentially delay plans for an IPO and allow the company to work on further improving its finances, so that it commands a higher valuation when it goes public.
“Stripe was robustly cashflow positive in 2023 and expects to be again in 2024,” wrote co-founders John Collison and Patrick Collison in their annual letter published in March.
At its peak in 2021, Stripe was valued at $95 billion. Even at its latest valuation of $65 billion, the company is among the highest valued private startups in the U.S. alongside Elon Musk’s SpaceX and ChatGPT maker OpenAI.
The payments processing company serves a variety of high profile customers including Musk’s social media platform X, Amazon, car rental firm Hertz Global and grocery delivery app Instacart.
Stripe allows companies to accept payments, send payouts and automate financial processes. It has headquarters in San Francisco and Dublin.