Stripe, the payments giant, has postponed its IPO, prompting its major investor Sequoia Capital to explore new ways to provide returns to its limited partners.
Sequoia Capital has reached out to LPs in funds raised between 2009 and 2011, offering to purchase up to $861 million in shares in Stripe. This move indicates a growing urgency for liquidity in the current IPO market. Although only four venture-backed tech IPOs have occurred in 2024, Sequoia’s confidence in Stripe’s future prospects is evident in their willingness to invest. The firm remains optimistic about Stripe’s ability to thrive across economic cycles.
Despite Stripe’s valuation dropping from $95 billion to $50 billion in 2021, recent efforts to provide liquidity to employees and investors have shown positive signs, with a valuation of $65 billion reported in 2023. Sequoia has invested a total of $517 million in Stripe since 2011, with the company’s recent valuation at $70 billion.
With Sequoia’s recent distribution of $10 billion to investors in 2023, their maneuvering to return cash to earlier funds suggests that Stripe may not pursue an IPO in the near future. Luciana Lixandru and Kevin Kelly, who sit on Stripe’s board, have inside knowledge of the company’s financial plans, raising speculation about Stripe’s eventual exit strategy. Despite competition and internal developments, Stripe’s impressive growth and financial stability may delay its IPO plans indefinitely.
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