Why Stripe’s Recent Investors Are Smiling Now

Stripe is back! The payments firm, long a favorite of Silicon Valley investors, is enjoying a rebound in business that is surely making those investors who bought into its March fundraising feel pretty, pretty good. Remember, Stripe raised money at a valuation of just $50 billion, a few billion dollars below its original sought-after pricing level and well off its early 2021 peak valuation of $95 billion. At the time, Stripe was coming off a sluggish 2022, when the e-commerce slowdown dampened its revenue growth and contributed to a $75 million loss for the year.

But as my colleague Cory Weinberg scooped this morning, Stripe earned an operating profit of $150 million in the third quarter alone, bringing profit for the first three quarters to $200 million. Revenue growth has improved to 35% in the third quarter (we’re talking net revenues, after Stripe gives credit card firms their cut of what it generates) from 25% for all of 2022. If you assume that Stripe’s net revenue of $1 billion in the quarter can be extrapolated to $4 billion annually, the company could be valued at $67 billion, applying rival payments firm Adyen’s forward sales multiple, according to Koyfin data. Notably, Stripe has lately been valued at around $61 billion in the secondary market for private tech stocks, based on both bids to sell and offers to buy, according to Caplight data.