The payments startup Stripe has lowered its internal valuation by 28%, according to reports, becoming the latest private company to readjust amid tech sell-offs on the public markets.
Last year investors valued Stripe at $95 billion, making it the fifth most valuable private company in the world. But employees were told this week the internal share price had decreased, valuing the company at $74 billion. The news was first reported by the Wall Street Journal.
Stripe has raised more than $2 billion in funding since it was founded in 2010, and counts Andreessen Horowitz and General Catalyst among its investors.
Shares in public tech companies began to fall this spring, on concerns over rising inflation and interest rates. That drop has prompted many private companies to evaluate their valuations, as it becomes harder to justify sky-high figures. In March, grocery delivery startup Instacart lowered its internal valuation by 38% from $39 billion to $24 billion.
Both Stripe and Instacart had been expected to go public in 2022, but the economic conditions now make this highly unlikely. The state of the IPO market doesn’t help—sales and public debuts of startups declined 88 percent to $49 billion in the first six months of the year, compared to last year, the New York Times reported.
Other companies have raised money in “down-rounds.” Klarna Bank, a payments startup, closed a funding round in July with a valuation of $6.7 billion, a gigantic fall from its $45 billion valuation in June last year.
Venture capitalists have made repeated warnings of an upcoming recession, and have told companies to freeze costs.Funding to startups in the United States fell 23 percent in the last three months, compared to the same period last year, according to PitchBook.