Stripe is likely to go public – but not just yet

Company is likely to list soon to get funding for deals and to reward backers and staff

Stripe founders Patrick and John Collison

Stripe founders Patrick and John Collison

 

Is Stripe finally about to go public? Don’t hold your breath: it is unlikely to happen today or tomorrow but all the indications are that it is slowly moving in that direction.

The online payments company has been ripe for a listing for some time now, according to pretty much every analyst you could think of asking, but it has held firm and for good reason. Earning plenty of revenues and with investors more than willing to give it money, it hasn’t needed to push for an IPO in the way other companies have.

Founders Patrick and John Collison have long downplayed talk of a listing, preferring instead to focus on products. But the brothers have found it hard to escape the talk, which has increased as Stripe has grown.

According to a Reuters report, the company has now made initial steps towards a stock market debut, hiring Cleary, Gottlieb, Steen & Hamilton as a legal adviser on early-stage listing preparations. The next step would be hiring investment banks.

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Sources have cautioned that a listing is unlikely to happen this year but it does make sense that the company would be weighing the idea.

Pressure is likely to be building from loyal employees keen to cash in on share options they have earned over the years and from long-term investors keen to realise a profit on their investment.

Evidence of the former is apparent from recent reports that the group offered investors the chance to purchase shares from early backers and employees past and present.

A Wall Street Journal report last month indicated that Stripe received bids amounting to more than $4 billion for what was described as “sizeable shares” in the company from existing shareholders. However, only about $1 billion of the bids were filled, the newspaper reported, with suggestions that some shareholders hesitated about selling stock amid talk of a possible public listing.

Going public wouldn’t just be welcome for employees but could also give the company more firepower when it comes to acquisitions. Stripe has been busy on the mergers-and-acquisitions front recently, investing in bigger deals that help it expand into areas more quickly than it could do organically.

All of this means that Stripe will probably go public but at a time when it, rather than the market, chooses.

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