Irish-founded fintech Stripe could be set for an initial public offering next year, as the company reportedly set a deadline of 12 months to decide on a stock offering or allow staff to sell their shares privately.
The reports, which first appeared in the Wall Street Journal, indicate that the company may be heading for a direct listing rather than a traditional IPO, allowing the market to determine the price of the shares.
Stripe did not comment on the claims. However, it is understood that the company is working with Goldman Sachs and JPMorgan Chase & Co to advise it.
The fintech, which recently signed an extended deal with Amazon to process more transactions, is one of the most valuable start-ups in Silicon Valley. Founded in 2010 by Patrick and John Collison, Stripe has built an extensive payments infrastructure for companies and handles billions of dollars in transactions each year. The company was valued at more than $1 billion in 2014, giving it “unicorn” status.
The company was one of the tech cohort that benefited from the pandemic-induced ecommerce boom, with annual revenue exceeding $7.4 billion in 2020, an increase of almost 70 per cent.
At a funding round in March 2021, the company was valued at $95 billion, but reports last year indicated Stripe had cut the internal value of its shares by 28 per cent, and it is thought to have fallen further since then.
Valuations in tech companies have fallen in recent weeks as the weaker macroeconomic environment has cooled sentiment. That has been compounded by a wave of private share sales as job losses have left some Silicon Valley workers rushing to offload their stakes in tech start-ups. Brokers and investors last month said secondary markets – where stakeholders in a private company sell shares to third parties – were being flooded by tech stocks as aggressive cost cutting hit tech companies across the board.
Stripe has not been immune to the volatility of the economy. The fintech announced in November it would cut up to 14 per cent of its global workforce, shedding 1,100 jobs amid an economic downturn that has seen job losses across the tech industry, bringing it back to February 2022 levels.