Inside Stripe’s $55 Billion Pitch to Investors

The company says its payments volume growth was 23% this year through the end of January, still faster than Airbnb, Amazon and DoorDash in the U.S. It also points to buzzy AI startups like OpenAI as clients. “Stripe structurally benefits from tech waves: mobile marketplaces, SaaS, and now AI,” one slide reads.

Stripe is working with Goldman Sachs to help fundraise for round, which will be Stripe's Series I and would value Stripe at $55 billion, according to the deck, down from a peak of $95 billion in 2021. Thrive Capital is expected to lead the investment. The company could need multiple rounds of funding, according to a person familiar with the matter.

Stripe says in the deck that it needs $4 billion by the end of 2024—a larger total than previously known—to cover a huge tax withholding bill that comes due when it modifies employees’ stock grants that are set to expire before a potential public listing. The company implies it needs $2.3 billion of that money by the end of the first quarter this year.

The pitch includes more sobering numbers about Stripe’s past year. Stripe’s gross revenue was $14.3 billion last year, up 27% from the prior year. That represented a slowdown from 60% growth from 2020 to 2021. Stripe said a net revenue figure called “transaction margin before losses” sat at $3.2 billion, up 25% from the previous year.

The Information previously reported that Stripe burned through more than $500 million of cash last year as its revenue growth rate fell sharply. A net revenue figure that takes into account fraud-related losses came in at about $2.8 billion, The Information has reported, representing growth of about 18%.

(See Stripe’s org chart here.)

Inside Stripe, the slowdown has inflamed concerns about the need for new lines of revenue, struggles to execute internal infrastructure projects, and the potential for the firm’s profit margins to shrink as it tries to lure bigger customers, The Information reported last month.

The deck shows that Stripe’s slowdown in payment volume over the past year narrowed the company’s lead over Dutch payment processing rival Adyen. Stripe also points to its fatter gross profits than Adyen, which focuses on lower-margin large customers, however.

Stripe also tries to paint a growth story outside of payments. The company says it is focused on growing three other lines of business in particular: corporate credit card issuing, financial management software, and one-click payments.

Stripe’s net revenue from non-payments products stood at about $280 million last year, the company wrote, about 9% of the total. The one-click checkout product, called Link, has about 14 million active users, the company said.

Stripe's deck doesn’t mention its efforts in crypto, which it had pushed into last year before that market collapsed.

The deck said the “use of proceeds” from the new cash would cover $4 billion for the withholding tax associated with expiring restricted stock units and the exercise of expiring options. The largest chunk of withholding tax—$2.3 billion—comes in the first quarter of this year. The company needs another $1.2 billion for RSU tax withholding through the rest of 2023 and 2024.

The cash needs are roughly double the amount of venture capital Stripe has raised in its history.

Stripe’s main payments business also is pinning its growth hopes in part on luring larger companies to its service. Stripe says its enterprise client base has more than quadrupled since 2019, from roughly 25 to 110 users who generate over $1 billion in payments volumes. It points to clients like Ford, Marriott and Toyota. Stripe said international regions—Latin America, in particular—are outpacing growth in North America.

The company, known for its international efforts and multi-country headquarters, still appears concentrated in the U.S., however. About three-quarters of its users came from the U.S. last year, the company said.