Stripe hires JPMorgan, Goldman Sachs to explore liquidity raise

The company is weighing a direct listing or a private market capital raise, according to a person familiar with the matter, who asked not to be named discussing internal deliberations. The hope is that either option would happen in the next year so that veteran employees with expiring restricted stock units can cash in, the person said.

A spokeswoman for Stripe declined to comment. Representatives for JPMorgan and Goldman Sachs declined to comment. The Wall Street Journal reported the banks’ appointments earlier.

The move comes after Stripe told staff late last year that it would cut more than 1,000 jobs as it seeks to rein in costs ahead of any economic downturn.

“We were much too optimistic about the internet economy’s near-term growth in 2022 and 2023 and underestimated both the likelihood and impact of a broader slowdown,” co-founders Patrick and John Collison said in November. “We grew operating costs too quickly. Buoyed by the success we’re seeing in some of our new product areas, we allowed coordination costs to grow and operational inefficiencies to seep in.”

Stripe and other tech firms have seen valuations drop as the growth in online spending slowed in the aftermath of the pandemic. Stripe has cut its internal valuation multiple times, most recently to $63 billion, according to reports. That’s far lower than the $95 billion value it had received from investors in its most recent fundraising.

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Still, the firm has also notched some wins. It just announced Amazon.com Inc. will “significantly expand” its use of Stripe’s core payments platform, allowing the upstart to begin processing “a significant portion” of the e-commerce giant’s total payments volume.