Stripe has initiated a share sale amongst its employees that has propelled its value from $70B to $91.5B, closer to its all-time high valuation of $95B.
In February 2024, Stripe’s private market valuation increased to $65B, and now, the company has achieved a greater milestone, increasing its valuation by 41% in just six months.
Stripe is now allowing its long-term employees to liquidate their stakes by selling their shares to investors. This share sale is the fuel behind the rise in the company’s valuation to $91.5 billion, a substantial increase from the $70 billion valuation reported just six months ago.
The tender offer provides liquidity to employees and indicates substantial investor confidence in Stripe. The 14-year-old Irish-American company has also dismissed any plans to launch an initial public offering (IPO), opting instead to channel its resources into research and development.
Stripe’s possible public listing has long been anticipated, and with the company reaching a much higher valuation, it has become a topic of conversation.
In 2024, John Collison, Stripe president and co-founder, said he and his brother Patrick, the company’s chief executive, did not plan to take it public as public markets were volatile at that time.
“With the IPO, we’re not in a rush. Businesses which are profitable have many, many more options than businesses which are dependent on outside capital,” Collison explained in an interview with the Financial Times.
Stripe rides the AI escalator to higher valuations
By the startup’s president, John Collison’s admission, the increase in Stripe’s valuation owes much to the overwhelming demand from artificial intelligence (AI) companies. Fintech startups, including Stripe, have gone all in with AI-driven applications that max out the technology on processes like fraud detection and transaction processing.
In 2024, Stripe processed an impressive $1.4 trillion in payments, a 40% increase from the year before. The company also acquired Bridge for $1.1B as part of plans to expand its payment processing capabilities with stablecoins. Stripe’s client portfolio features high-profile names such as Elon Musk’s X, Amazon, Hertz Global, and Instacart.
Co-founders and siblings John and Patrick Collison, in their annual letter, emphasized the company’s sustained profitability in 2024 and projected continued financial health into 2025.
The company previously plunged from its peak valuation of $95B to $50B in 2023. The company has since rebounded and looks to be on its way back to its peak.
Other fintech start-ups like Chime and Klarna were also affected during the market volatility of 2023 but have since bounced back. Both companies are now preparing to go public.
Stripe has no intentions to follow suit at the moment but could potentially be open to it depending on what’s best for the company. “We’ve stayed private longer than most tech companies, and that’s been a positive,” Stripe president John Collison said. “We can plough profits back into research and development but we’re not dogmatic . . . We decide what’s best for the business on an ongoing basis.”
Collison stated that the impact of AI on companies’ revenue and growth has resulted in private companies being much more capable of reaching higher valuations than at the crest of investment frenzies in 2021 and 2022.
“These [AI] companies that are very fast-growing have very steep revenue ramps, because the products are very useful. You should be able to see real impact,” he said. “Is this going away as a sector? Absolutely not. Companies are voraciously buying what [AI start-ups] OpenAI, Anthropic and Cursor have to sell because it provides use to them. You can have self-referential speculative bubbles like crypto, but AI is driven by real utility.”
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