San Francisco startup Stripe has raised new financing that values the startup at about $9 billion, cementing its status as a major company in the crowded digital payments space and heralding a possible initial public offering.
CapitalG, the late-stage investment arm of Mountain View’s Alphabet, and venture capital firm General Catalyst Partners, which has offices in Palo Alto, led the $150 million round, with participation from existing investors including Menlo Park’s Sequoia Capital.Image:
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Stripe was previously valued at $5 billion and has raised more than $450 million to date.
“The company’s valuation is a reflection on its size, scale, potential profitability and an unbounded market size,” General Catalyst managing director Hemant Taneja said, comparing Stripe to Amazon Web Services, the e-commerce giant’s cloud-computing business, which pulls in more than $2 billion in quarterly revenue.
Stripe’s soaring value is a bright spot in a startup sector that has seen mostly stagnant or falling valuations this year. India’s top ride-hailing service Ola is seeking new funding at a 40 percent lower valuation. The Bloomberg U.S. Startups Barometer has fallen 8.9 percent in the past year.
Stripe also got revolving credit of up to $250 million from JPMorgan Chase, Goldman Sachs Group, Morgan Stanley and Barclays, according to people familiar with the financing. They asked not to be identified because the transaction is private.
These banks are vying for IPO clients in the tech industry. Given that startups rarely use venture capital financing to pay back debt, the fact that Stripe is borrowing cash suggests that lenders believe the company can pay the money back from profit or by raising capital in the public market, said Jay Ritter, professor of finance at the University of Florida.
By Jing Cao | Read the rest on sfchronicle.com
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About Stripe: – “The new standard in online payments” – Stripe is the best software platform for running an internet business. We handle billions of dollars every year for forward-thinking businesses around the world.
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