Payments giant Stripe cuts internal valuation by 28%



Digital Banking

The fintech joins a trend of valuation drops in the industry, but unlike others has made the cut itself.

Payments giant Stripe cuts internal valuation by 28%

Image source: Patrick & John Collison/Stripe.

Stripe has become the latest fintech to take a huge valuation cut as the market downturn continues to impact the industry.

The company has reportedly slashed the internal value of its shares by 28 per cent, sources told the Wall Street Journal.

Stripe was last valued at $95bn following a $600m Series H raise in March 2021, making it the most valuable fintech.

The Journal reported that the valuation cut comes from a 409A price change, an independent appraisal, that saw shares drop from $40 in the last valuation to around $29, in turn lowering the implied valuation of the shares to $74bn, according to one source.

San Francisco-based Stripe reportedly sent an email to employees with the information, and also said the board approved the lower share price effective 30 June, but did not provide an explanation about the decision.

Following a successful year of fundraising in 2021, many fintechs have seen the tides turn this year in line with the market downturn.

While at first it looked like they might be immune, rising interest rates and the likelihood of an economic recession have hit the industry, with mass layoffs, hiring freezes and valuation cuts.

Stripe saw Fidelity cut its valuation by 9 per cent in March this year, but co-founder John Collison said he was undaunted by the looming recession.

The news of Stripe’s valuation cut comes days after Klarna had its own valuation cut by a massive 85 per cent to $6.7bn after it raised $800m of new funding.

It was valued at $45.6bn in 2021, but in contrast to Stripe saw its valuation cut by its investors, which include Sequoia, Silver Lake and the Commonwealth Bank of Australia.

Stripe’s competitor PayPal has also seen its stocks decrease by more than 60 per cent since the year started.

Stripe declined to comment.

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