Stripe Gets Second Valuation Cut in 6 Months, Now Worth $63B

• Stripe, an Irish-American financial services and SaaS company, has received its second valuation cut in 6 months.
• The latest valuation pegs the company’s internal value at $63 billion after an 11% cut in its share price.
• This valuation was done through a 409A estimation done by a third-party, which uses a benchmark of factors to determine the company’s worth.

Stripe, an Irish-American financial services and SaaS company, has seen its valuation decrease for the second time in six months. The latest valuation pegs the company’s internal value at $63 billion, a decrease of 11% from its last valuation. The decrease in valuation is a sign of the current market outlook and the underlying strain on the fintech sector.

The valuation for private entities like Stripe is done differently than publicly listed companies, which rely on market capitalization of their stock. Instead, private entities get valued after a funding round or through a third-party estimation using a benchmark of factors. In the case of Stripe’s recent valuation cut, no funding was raised, and the estimation was done through a 409A price change.

A 409A price change is a method of estimation that is done by third-party companies and is regulated by the Internal Revenue Service (IRS). This method looks at a range of factors to determine the company’s worth, such as the company’s current financials, future prospects, and the overall market outlook. By looking at these factors, a more accurate picture of the company’s worth is created.

The decrease in valuation is a sign of the current market outlook, and it has led to layoffs within the company. In November of last year, Stripe laid off as many as 1,120 of its employees. Although the company is still valued at a large amount, the decrease in valuation is a sign that the fintech sector is yet to recover from the underlying strain that has been present for some time.

As the market outlook shifts, so too will the valuation of private entities like Stripe. By using a third-party estimation such as the 409A method, companies can get a better sense of their worth and make changes accordingly. With the current market outlook, it will be interesting to see how Stripe’s valuation shifts in the coming months.