The venture capital fund is reportedly cashing out people who bought in between 2009 and 2012
A major fintech player could be cashing out early investors soon in a major deal. Axios reports that payment processor Stripe might be about to let people who bought into the company 15 years ago sell their shares to the venture capital fund Sequoia Capital in a deal valuing the firm at $70 billion. Though the offer is worth less than the $95 billion valuation that Stripe got in 2021, it’s much higher than the $50 billion valuation that Stripe received last year during a fundraising round.
The early years of the COVID-19 pandemic spurred a great deal of optimism for e-commerce companies like Stripe as consumers ramped up their shopping from home. Because Stripe provided services to the back-end operations of many e-commerce companies, it expected to benefit and hired like it. But those sky-high hopes came back down to Earth as inflation and high interest rates rose alongside a new set of geopolitical challenges, including the war in Ukraine, which made it harder for growth-minded non-public companies to raise funds.
“At the outset of the pandemic in 2020, the world rotated overnight towards ecommerce,” co-founders Patrick and John Collison wrote in a 2022 memo announcing the layoffs of 14% of the company’s workforce. “We witnessed significantly higher growth rates over the course of 2020 and 2021 compared to what we had seen previously. As an organization, we transitioned into a new operating mode and both our revenue and payment volume have since grown more than 3x…The world is now shifting again. We are facing stubborn inflation, energy shocks, higher interest rates, reduced investment budgets, and sparser startup funding.”
The offer from longtime Square $SQ backer Sequoia, per Axios, would go to investors who contributed to fundraises between 2009 and 2012. Neither Square nor Sequoia have publicly commented on the deal.
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