Thrive Capital is believed to be leading a new multi-billion dollar investment in Stripe • TechCrunch

Thrive Capital has reportedly committed $1 billion in new capital to payments giant Stripe as part of a new investment in the works that will value the fintech company at between $55 billion and $60 billion.

TechCrunch reported last week that Stripe was seeking to raise $2 billion, but the figure may actually be closer to $2.5 to $3 billion, according to reports from New York Times and The information. In an unusual twist, Stripe is believed to be raising new funds to, as The Information reported, “address the issue of expiring restricted stock for some of its veteran employees — and a massive tax bill for employees who are likely to follow.”

Neither Stripe nor Thrive Capital commented on the rumors when contacted by TechCrunch.

Thrive Capital is believed to be leading the new investment in Stripe. The New York-based firm, started by Joshua Kushner, also led the company’s $70 million Series C in 2014 when it was valued at $3.5 billion.

By 2021, Stripe will go on to achieve the highest valuation ever for a private company raised $600 million at a $95 billion valuation. But Stripe has not been immune to the global downturn: In November it was temporarily laid off 14% of employees, or around 1,120 people. And the company has cut its internal valuation more than once in the past year. Earlier this month, TechCrunch reported that Stripe had cut its internal valuation to 63 billion dollars. This cut of 11% came after an earlier internal valuation cut it valued the company at $74 billion.

Last week, Stripe apparently told employees it had it set a deadline of 12 months for itself to go public, either through a direct IPO, or by pursuing a transaction in the private market, such as a fundraising and a tender offer. But most industry observers believe that a fundraising scenario is a far more likely one for the company.

Fintech analyst Alex Johnson told TechCrunch that Stripe may be pushing for an exit because it has potentially “hooked on some really talented early-stage employees by promising them a big ‘exit'” on their equity.

He added: “My guess is that the market for Stripe secondaries has declined quite a bit in the last year and the employees are feeling frustrated and putting pressure on Stripe’s management to do well.”

The decline in e-commerce as restrictions due to the COVID-19 pandemic eased certainly led to less revenue for Stripe. Stripe reportedly had gross revenues of $12 billion and was EBITDA profitable in 2021, according to Forbes. The company’s products, in its own words, “power payments for online and in-person retailers, subscription businesses, software platforms and marketplaces, and everything in between.”

By 2022, according to The Information, Stripe’s gross revenue was $14.2 billion.

The company has reportedly struggled in recent years in the face of increased competition. The information also reported that Stripe has seen a number of initiatives that have not materialized as hoped. For example, according to that publication, the company last fall “wound up a major project called Sonic, which would rewrite significant portions of Stripe’s code in part to speed up transactions—an important step toward reducing cloud computing costs and increasing profit margins ahead of a major public IPO.”

Indeed, as a business that has traditionally derived revenue from variable transaction volume, Stripe appears to be exploring ways to generate meaningful — and predictable — revenue. For example, Amazon announced on January 23 that it plans to “significantly expand” its use of Stripe. Reported Decorations: “Under the new agreement, Stripe will become a strategic payment partner for Amazon in the US, Europe and Canada, processes a significant portion of Amazon’s total payment volume. Stripe will be used across Amazon’s business units, including Prime, Audible, Kindle, Amazon Pay, Buy With Prime and more.” Also, TechCrunch recently reported on how new fintech startup Mayfair pays Stripe a fee as part of its mission to offer companies a higher return on their money.

Founded by Irish brothers John and his brother Patrick Collison (CEO), Stripe has raised more than $2.2 billion in funding since its inception in 2010 from investors such as Allianz (via the Allianz X fund), Axa, Baillie Gifford, Fidelity Management & Research Company, Sequoia Capital, General Catalyst, Base Partners, GV and an investor from the founders’ home country, Ireland’s National Treasury Management Agency (NTMA).

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