At a valuation of $95 billion dollars, Stripe stands as the most valuable fintech startup in the world, and second only to ByteDance in terms of private company size globally.
As a leader in the ever-growing financial technology landscape, it’s understandable that all eyes are fixed firmly on spotting any indication as to whether Stripe will soon go public. With this in mind, will 2022 finally be the year where we see a long-awaited blockbuster debut on Wall Street?
The exponential growth surrounding the 2020 IPO market paved the way for widespread excitement as to what 2021 would look like in terms of the major tech listings that seemed ready for launch. But aside from the mixed fortunes that accompanied Coupang and Robinhood IPOs, as well as Coinbase’s difficult start to life following a direct listing, a year that promised so much has left a lot to be desired.
However, 2022 may play host to a range of exciting IPOs, with the financial sector front and centre with a host of major listings that appear to be lined up. Among the companies at the forefront of next year’s leading debuts stands payments provider, Stripe.
(Image: Statista)
Following a $600m fundraiser in early 2021 which placed Stripe at a value of $95 billion, the company became the biggest startup in the US – outpacing Elon Musk’s SpaceX by some $21 billion.
The company, which has dual headquarters located in San Francisco and Dublin, attracted global investors including Ireland’s sovereign wealth fund (NTMA), Allianz X, AXA, Fidelity Management & Research Company, Sequoia Capital and Baillie Gifford.
The fundraiser led to Stripe almost tripling its valuation within 12 months, having attained a value of $36 billion following a fundraising round in April 2020.
Is a 2022 Stripe Debut on the Cards?
In September 2021, Bloomberg sparked widespread excitement when it reported that Stripe was in early discussions with investment banks about going public in 2022 – according to what the business news outlet termed ‘people with knowledge on the matter.’
Interestingly, Bloomberg also speculated that Stripe could opt for a direct listing, rather than taking up an initial public offering on its stock. Though the sources also conceded that Stripe’s timing and plans are still subject to change in the near future.
While direct listings are a largely unconventional way for companies to debut on public markets, the approach is becoming increasingly popular – particularly among tech startups. In 2018, Spotify seemingly kicked off the trend by opting for a direct listing, whilst cryptocurrency exchange Coinbase chose to undergo a direct listing in a knowing nod to what the company believes is the democratizing effect of cryptocurrency.
In July Reuters had even reported that Stripe had hired Cleary Gottlieb Steen & Hamilton LLP as a legal adviser for the early stages of its listing preparations.
In the wake of the positive news, Nasdaq’s website had even published articles that positioned Stripe at the top of its ‘2022 listings to watch‘ content. However, by November, Stripe co-founder John Collison had confirmed that the company is currently very happy to remain private.
“We’re very happy as a private company,” Collison said. “Part of where our patience stems from is the fact that it feels like we are very early in Stripe’s journey.”
Collison’s words indicate that, despite an extremely high market valuation, Stripe is in no rush to list on a stock exchange.
Patience is a Virtue
Interestingly, Stripe’s patient stance is part of a growing trend across the fintech landscape. In July 2021, UK fintech startup Revolut was catapulted into the top 10 startups in the world based on funding round valuations after a fundraiser of $800 million delivered a valuation of $33 billion.
Overall, the fintech sector focused on payments is on the rise globally. From Paypal and Klarna to Stripe and Connectum, the latter of which leverages cross-border payments and multi-currency processing, all backed up by artificial intelligence-powered security systems to protect from fraud.
If John Collison is correct in his belief that Stripe is still ‘very early’ in its journey, then the company’s subsequent listing will likely be even more eye-watering based on its potential market capitalization.
However, this may not be news that’s greeted with such open arms by prospective investors who would’ve preferred to have bought into the company prior to undergoing subsequent periods of growth.
By opting to have a more patient approach to listing, Stripe’s stock may not experience the same rate of growth as a 2022 listing, but it’s far more likely to arrive as a far more sustainable, profitable and stable stock.
