Patrick & John Collison/Stripe.
Stripe raises $6.5bn downround, partners with OpenAi on GPT4 product
Stripe is quick to point out “does not need this capital to run its business.” But instead will be providing liquidity to its employees, past and present following a near 50 per cent valuation cut.
Stripe, one of the largest global fintech companies, has raised a huge funding round of $6.5bn.
Yes, you read that right. $6.5bn.
The company was previously valued at $95bn when in 2021 it last raised funding through a $600m Series H round. This latest cash injection came at a $50bn valuation, meaning the company has now officially opted for a so-called ‘down round’.
Stripe is quick to point out “does not need this capital to run its business,” according to a press statement.
Rather, it says, the business will use the mammoth funds to simplify some budding issues with employee equity packages.
More specifically, the cash will provide liquidity to current and former employees while addressing employee withholding “tax obligations”. These Stripe shares will then be retired to offset the issuance of new shares to the Series I investors.
“Over the last 12 years, current and former Stripes have helped build foundational economic infrastructure for millions of businesses around the world, and this transaction gives them the opportunity to access the value they’ve helped create,” said John Collison, cofounder and president of Stripe.
“But the internet economy is still young, and the opportunities of the next 12 years will dwarf those of the recent past. There’s so much to discover and to create. For us, it’s now back to work.”
Investors in the round include existing Stripe shareholders—Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital— joined by new investors such as GIC, Goldman Sachs Asset and Wealth Management, and Temasek.
Stripe has also clocked up a new partnership with OpenAI, the owner of ChatGPT, which this week announced its latest product ChatGPT 4.
OpenAI will now use Stripe’s payment platform as it shifts gear into commercialising its 100 million users of ChatGPT and DALL·E generative AI services. Stripe will also incorporate OpenAI’s GPT-4, into its products and services.
“We're excited to work with Stripe to monetize our flagship products,” said Peter Welinder, vice president of product and partnerships at OpenAI. “Beyond payments, Stripe is helping us with everything from recurring billing and tax compliance to automating our financial operations.”