Stripe hires Goldman, JP Morgan to explore listing and private share sale

Jan 30, 2023 | News

Digital payments firm Stripe has hired Wall Street banks Goldman Sachs and JP Morgan to explore a public listing and alternatives to allow employees to cash out stakes in the private company, two sources familiar with the matter told Reuters.

The move, communicated to Stripe employees in an internal memo earlier on Thursday, would give them an opportunity to sell shares in the company either to private investors or in a public market, the sources said.

Primary investors include Allianz X, Axa, Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital, and Ireland’s National Treasury Management Agency (NTMA).

Either possibility would address the problem that some employee share options are coming up for expiry but Stripe shares are not currently listed.

The aim is to have one arrangement or the other in place within a year, the sources said, adding that if private sales are arranged the buyers will cover tax costs.

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A 2021 round of fundraising valued Stripe at $95bn, but the sources said the company had recently cut its own assessment of its value to $65bn.

Stripe has been one of the most anticipated candidates for U.S. tech listings. Reuters reported in 2021 the company had hired a law firm to help with preparation for a stock market debut.

However, the share market selloff has resulted in a long drought of U.S. initial public offerings. Proceeds from such transactions in 2022 were down 95% from a year earlier at $8bn, the least since 1990, Refinitiv data shows.

Many companies backed by venture capital that would normally be regarded as mature enough for public listing have postponed such plans, hoping for higher valuations when the market recovers.

Stripe does not plan to use its own balance sheet to fund the buying back, one of the sources said, and it could opt for direct listing, a way to list on exchanges that does not raise capital.

The Wall Street Journal reported earlier on Thursday that Stripe had approached investors to raise at least $2bn at a valuation of $55bn to $60bn.

The Information tech-industry publication reported Stripe’s 2022 revenue was $14.4bn.

Source: Reuters

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