Given Stripe’s rapidly growing userbase and impressive revenue numbers, investors were seemingly willing to pay a lofty price for the company’s shares. This is especially noteworthy given that Stripe has yet to turn a profit. Investors clearly believe that there is significant potential for continued growth at the San Francisco-based startup.
The news that Stripe is seeking to raise $2 billion at a valuation of $55 billion to $60 billion has investors worried that the company may not be able to sustain its current level of growth. The company’s approach of using the money to cover a large annual tax bill associated with employee stock units is likely generating concern. If these negotiations fail, it could have a negative impact on Stripe’s stock price.
While Stripe was said to have set a 12-month deadline for itself, it is unclear what prompted the company to make this decision. It is possible that Stripe may feel pressure to go public amid competition from tech giants like Facebook and Amazon. However, given the current market conditions it may be more prudent for the company to pursue a transaction on the private market.
Stripe is a company that provides merchants with a variety of payment processing options, one of which is accepting payments in cryptocurrency. This could be attractive to businesses that want to accept Bitcoin or other cryptocurrencies as payment, as it avoids the need for them to purchase and manage their own cryptocurrencies.
The news of Stripe’s struggles comes as some bad news for the tech industry. With companies like Facebook and Twitter seeing their stock prices plummet recently, it is clear that there are many risks out there to investors. This makes it harder for smaller companies, like Stripe, to compete on a larger scale.
Though a $55 billion to $60 billion valuation would be characterized as a down round by many observers, Stripe would hardly be the first large fintech to incur such a fate. Fellow European and BNPL behemoth Klarna last year raised $800 million at a $6.7 billion valuation, an 85% drop compared to the $45.6 billion it was valued at in June of 2021.
Some believe that Stripe’s impressive growth will only continue in the future. Given its track record of being both EBITDA profitable and gross revenue-rich, it seems likely that Stripe will maintain its position as one of the most successful businesses in the world.
Many fintech startups, such as Stripe, have hit road bumps in recent months due to increasing competition. Decacorn Plaid, a small fintech startup, laid off 260 employees in December due to slower than expected revenue growth. This illustrates the intense competition that many startups face as they try to grow their businesses.
The public spat between Stripe and Plaid is a case study in how two companies that are partnered can still compete vigorously. Stripe, who has been proactive in developing new products such as Financial Connections, saw its business model threatened by Plaid’s aggressive push to expand into payments. However, despite the rivalry, both companies maintain a healthy relationship and continue to work together on larger projects.
Stripe is a company that enables online and mobile payments. The company was founded by Irish brothers John and Patrick Collison, who also serve as its CEO and Vice President of Engineering, respectively. Since its inception in 2009, Stripe has raised over $2.2 billion in funding from investors including Allianz – via its Allianz X fund – Axa, Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital General Catalyst Base Partners GV and an investor from the founders’ home country Ireland’s National Treasury Management Agency (NTMA). Stripe’s mission is to make it easy for anyone to get paid online without having to deal with annoying technicalities or long payment processes.
Fintech is quickly becoming one of the most popular and profitable industries in the world. In fact, some experts believe that it could soon become the largest sector of the global economy. As a result, there is a lot of
TechCrunch is excited to debut our weekly podcast series, which focused on the latest and greatest in technology. This week’s episode features a conversation with Elizabeth Stark, the CEO of Stellar. Stellar is a company that provides an innovative payment system that aims to make it easier for people to conduct transactions across different borders.
