The Silicon Valley-based firm is seeking funds in a round led by New York-based Thrive Capital. The VC firm, founded by businessman Joshua Kushner, is expected to put about $1 billion into Stripe, the New York Times reported Monday.
According to the report, the latest fundraising is expected to value the payments startup at between $55 billion and $60 billion, which is a significant drop from the previous round’s $95 billion valuation.
Since its inception in 2010, Stripe has raised approximately $2 billion in venture capital from Sequoia Capital, Founders Fund and General Catalyst.
This comes against the backdrop of the company weighing options between a public listing and a capital raise in the private market. Stripe had also hired JP Morgan Chase and Goldman Sachs to explore liquidity options, as previously reported by the US press.
The potential $3 billion round of funding is expected to give the payments company some breathing room and ease the pressure to go public, according to The Information.
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According to the report, Stripe will likely use the new money to address the issue of restricted stock expiration for some of its veteran employees — and a huge employee tax bill that likely comes with it. Thrive Capital had first invested $30 million in Stripe in 2014 with a valuation of $3.5 billion. Stripe closed a $700 million funding round that year. If the VC firm goes through with this deal, it would be its biggest gamble yet.
Earlier this month, the digital payments company had cut its valuation by 11% to about $63 billion, The Information reported. In July last year, Stripe cut its valuation by 28%. The company has cut its valuation by nearly 40% in the past six months, the report said.
Stripe is one of several U.S. tech companies to have laid off workers during an economic downturn. The company reportedly first laid off employees in August at TaxJar – a tax compliance startup it acquired in 2021.
According to a TechCrunch report, about 45-55 employees were asked to leave Stripe. In a second round of layoffs last November, the company had announced a 14% headcount cut, leaving about 7,000 employees.