FinTech: Payments Giant Stripe May Accept A Lower, $50B Valuation In Funding Round

March 2, 2023 | FinTech, News, Venture Capital

As negotiations progress, investors are reportedly seeking to lower the Stripe valuation.

Payments processing company Stripe has reduced the valuation of its $55 billion fundraise by around 10%, according to sources cited by The Information. The valuation has been reduced from $23 per share to around $20 per share, bringing the company’s overall valuation down to $50 billion.

Stripe has faced difficulties in obtaining funding as investors reportedly believe the valuation is too high. Stripe declined to comment on the reports. (PYMNTS)

Significantly, the company reduced its internal valuation three times since last year, with the most recent cut taking place in January.

The Dublin-based firm saw its fortunes rise during the pandemic-fueled online shopping boom, with more than 200,000 companies signing on between the onset of the pandemic in 2020 and early 2021. In 2021, Stripe raised $600 million at a staggering $95 billion valuation.

However, now investors are questioning the sustainability of high-tech company valuations as inflation rises and shakes up the American bond market.

Moreover, Stripe is said to be still unprofitable, while listed rival Adyen (AMS: ADYEN) posted EBITDA profitability last year and is trading at less expensive multiples.

Despite the issues with its valuation, Stripe expects to process $1tn in payment volume for 2023, up from $800bn in 2022.

In January, the company announced that BMW of North America had chosen it as its primary payments’ infrastructure, while Amazon and Stripe formed an agreement that marked a major expansion of the eCommerce giant’s use of the payment platform.

Related Story:  Stripe Could Raise $2.5B At A $55B-$60B Valuation

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