Stripe Reportedly Cuts Valuation for Third Time Since June 2022

Stripe has reportedly reduced its internal valuation by 11%, the third cut since last year.

The reduction represents an implied valuation of $63 billion for the payments company, The Information reported Tuesday (Jan. 11), citing a source familiar with the matter.

The lowered valuation also comes as other tech companies are also reducing their own valuations as investor sentiment cools.

Reached by PYMNTS, Stripe declined to comment.

Stripe, which was valued at $95 billion following a $600 million funding round in 2021, slashed its internal valuation by 28% in June 2022. A smaller cut followed in October, adding up to a 40% reduction over six months.

The lower internal price—known as a 409a valuation— is different from the valuation decided by investors. It can help employees by lowering the cost of their equity in the company.

The reduction comes two months after Stripe announced it was laying off 14% of its staff, admitting to the “very consequential mistakes” of increasing operating costs too quickly and underestimating the threat of an economic slowdown.

“We overhired for the world we’re in … and it pains us to be unable to deliver the experience that we hoped that those impacted would have at Stripe,” CEO Patrick Collison said in a message to employees in November.

Based in Dublin, Ireland, Stripe processes eCommerce payments, and saw its fortunes bloom during the pandemic and the resulting online shopping explosion. More than 200,000 companies signed up for the company’s services between the start of the pandemic and early 2021, with Stripe processing more than 5,000 requests per second in 2020.

But as PYMNTS has noted, some investors questioned the sustainability of rising valuations for tech companies, as inflation was creeping up and shaking up the American bond market.

In August, T. Rowe Price Group’s Global Tech Fund reduced its valuation of Stripe and other tech companies amid diminished investor enthusiasm. Also cut was Instacart, which has reduced its own internal valuation four times since last year.

The most recent cut came in late December, when the grocery delivery company lowered its in-house valuation by 20% to $10 billion, down from $24 billion in March 2022, $15 billion in July and $13 billion in October. Instacart’s peak valuation was $39 billion, set in early 2021.

The company had planned to go public last October but put those plans on hold to wait for a more favorable business climate, as last year was one of the worst years for initial public offerings (IPOs) in more than a decade.

December also saw London-based payments platform Checkout.com reduce its internal valuation to around $11 billion.

In a statement issued to PYMNTS at the time, the company said it told its workforce it will “align equity awards to an updated tax valuation that reflects the current macroeconomic conditions.”