Stripe cuts valuation by 11%
According to tech website The Information, Stripe has decreased its internal valuation thrice since last summer, this time by 11% to $63 billion.
Stripe's valuation was reduced by 28 percent in July, knocking $21 billion off the $95 billion estimate made by investors at a fundraising round in March 2021. In October, another cut was made. According to The Information, the new price, known as a “409a valuation,” represents a 40% decrease in internal valuation over the previous six months.
This differs from the valuation given to the company by outside investors and can help employees understand the price of their stock ownership in the company.
Similar steps were taken by online payment company Checkout.com last month. Checkout.com reduced its internal valuation from an investor-determined $40 billion to $11 billion, effectively lowering the price at which employees can exercise their stock options from $252 per share to $65 per share under the new internal tax valuation.
Stripe laid off more than 1,100 employees in November, or 14 percent of its workforce, as CEO Patrick Collison warned of "the beginning of a changed economic climate."
At the time, Collison maintained that Strip is "fundamentally well-positioned to weather hard circumstances" but that it must align investments with the changing economic reality.
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