Stripe is a fintech giant that specializes in payment processing. Their services are widely used, so it’s highly likely you’ve encountered them at some point. In 2022 alone, the company processed more than $800B in transactions.
The company is well past deca-unicorn status, and has received billions in investment from firms like Andreessen Horowitz and Sequoia Capital.
Being such a hot commodity, it’s no wonder that retail investors are wondering how they too can buy shares of Stripe. Below, we’ll discuss two ways to invest in the company.
Is Stripe Publicly Traded?
No, Stripe is not a publicly traded company. Like many large, successful startups before them, Stripe has been able to stay private through the consistent infusion of venture capital investments. According to Crunchbase, they’ve received $8.7B in funding.
Will Stripe IPO?
As of August 2023, Stripe is not currently on the IPO Calendar. This means while a future initial public offering is possible, nothing is imminent.
It’s normal for companies with the financial runway to wait for the right market conditions to IPO to do so. With the rapid rise of interest rates and disruption to private valuations, 2023 has been a slow year for IPOs so far. In fact, a CNBC article recently highlighted an 18 month drought in major technology company IPOs.
The company is also reportedly considering whether to perform a traditional IPO or to do a direct listing.
While there’s nothing on the calendar yet, it seems likely that Stripe will go public at some point in the future.
How To Invest In Stripe With StartEngine
StartEngine, a popular equity crowdfunding platform for investing in startups, recently announced their latest StartEngine Private offering – Stripe.
What Is Being Offered?
The offering is structured as a series LLC which will hold the Stripe shares. Investors will own shares of the series LLC and will not directly hold the Stripe stock. Based on the level of investor interest ($2.6M has already been reserved), StartEngine will acquire Stripe shares for the offering. Stripe is not involved in the offering.
This is planned as a Regulation D investment. That means it can still be SEC-qualified, but it will be exclusive to accredited investors. The minimum investment is $4,980.
How To Make An Investment
You can register an account on the platform for free.
After registering, navigate to your Investor Profile inside the settings menu.
Make sure the Finance information is up-to-date and accurate.
In Overview click the arrow next to the “Accredited Investor” row.
After reading everything, self-certify as an accredited investor by selecting “Yes” and then “Save.” This will fail if the Finance information is not set or does not meet the threshold for being an accredited investor.
From the offering page, click “Reserve Now.” Then, enter your desired investment amount, review everything is correct, and click “Complete Reservation.”
This is just a reservation to show interest. You will not be charged for the reservation.
Once the offering is ready to go live, StartEngine will send a notification to everyone that reserved shares.
Once you’ve been notified that the offering is live, you will be able to finalize your investment. That may require reading through the terms and conditions for the offering. At this point, payment for your investment will also be required to complete your investment.
One Other Option For Buying Stripe Stock
For accredited investors, there are other investment options available. Stripe shares have reportedly been accessible from Equitybee. They have a unique investing model. Investors fund an employee’s stock options for a share of the potential proceeds when a liquidity event occurs (such as an IPO).
Latest Stripe Stock Price
According to TechCrunch, Stripe raised a hefty $6.5 billion in Series I funding in March with a $50 billion valuation. That was a down-round and a significant step-down from their previous ~$95 billion valuation in their Series H from March 2021. The StartEngine offering cites a valuation as high as $152 billion in 2022.
Should You Invest In Stripe Stock?
Investing in a private, pre-IPO companies like Stripe carries significant risk.
- Liquidity – You may be required to hold the investment for an indefinite period of time. There is no guarantee a liquidity event (such as IPO) ever occurs.
- High Risk Of Loss – Even if a liquidity event does occur, there is no way to know what price stock market investors will be willing to pay for stock of the company. SoftBank once valued WeWork at $47B. It debuted on public markets for a $9B valuation, which now sits at less than $500M.
- Future Growth – Stripe’s $50B valuation already makes it one of the largest companies in the world. That number is based in large part on the current size and success of the business, as well as future expectations. However, there’s no guarantee the company will be able to continue its rate of growth. That could make it more difficult to achieve higher valuations / market capitalization in the future.
On the other hand, the investment could have significant upside if the company later IPOs at a much higher valuation.
Whether or not you should invest in Stripe or not basically comes down to your risk tolerance and expectations for returns. Do you think the potential reward is large enough to accept the risks (including the full loss of your investment principal)?
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