Stripe climbs back to $70 billion valuation as Sequoia offers liquidity to investors

Despite being a highly valuable company, payments giant Stripe's decision to delay its initial public offering (IPO) has created challenges for investors seeking liquidity, particularly in light of the sluggish IPO market in 2024 that has stifled liquidity for several tech companies. 

Notably, current investors holding shares in the fintech company and seeking to exit have faced challenges in cashing out.

To address this liquidity crunch, venture capital firm Sequoia Capital, major investor in Stripe, has offered to buy shares directly from its limited partners (LPs) who invested in Stripe through funds raised between 2009 and 2011. 

According to Bloomberg, Sequoia is offering $27.51 per share and is willing to purchase up to $861 million worth of shares as a creative solution to provide liquidity for investors in a letter to LPs. Sequoia now values the payments processing platform at $70 billion with its position valued at $9.8 billion, according to the letter.

Notably, Stripe's valuation has fluctuated in recent years. In March 2021, the company achieved a peak valuation of $95 billion, making it one of the most valuable private startups globally. However, in 2023, Stripe's valuation adjusted to $50 billion following a Series I funding round. This was followed by a tender offer in February 2024, providing liquidity to employees at a valuation of $65 billion.

While the probable $70 billion valuation reflects a climb back from the 2023 dip, it still falls short of the 2021 peak.

Stripe raises $6.5 billion, cuts valuation to $50 billion

Payments processing giant Stripe says it has raised $6.5 billion in a Series I funding round at a $50 billion valuation – down nearly 50% from two years ago. According to a company statement, the funding “will be used to provide liquidity to current and former employees and address employee

TechloyEmmanuel Oyedeji

Despite the valuation adjustments, Stripe still remains one of the world’s most valued startups with impressive financial health. In 2023, the company surpassed $1 trillion in total payment volume, reflecting a 25% year-over-year increase. Additionally, Stripe boasts positive cash flow, indicating a strong financial position and the ability to invest in future development without immediate pressure from public markets.

Stripe's recent move, including the tender offer in March and Sequoia's LP share buyback proposal, suggest a strategic shift towards long-term growth over an immediate IPO. This aligns with comments from Stripe co-founder John Collison during the company’s annual user conference, emphasizing the company's commitment to developing products and growing the business organically, rather than rushing into a public debut.

While investor appetite for liquidity remains a factor, Stripe's financial strength and focus on innovation suggest they are well-positioned to navigate the current market climate. With a $70 billion valuation and a commitment to long-term success, Stripe is poised to remain a dominant force in the fintech landscape for years to come, regardless of the IPO timeline.