Stripe IPO: Will it Happen in 2023?

In the world of digital payment processing, Stripe Inc. is king. Despite slowed growth in 2022, the company generated reported gross revenue of $14.4 billion.

Now, with 10 months of 2023 lying ahead, there’s one massive question lingering over the company: Is an initial public offering (IPO) in its future, or will another year go by without it?

According to a recent Reuters report, Stripe is believed to be close to raising $4 billion in capital at a valuation of approximately $55 billion.

Despite the fact that it could be one of the largest private funding rounds in recent history, don’t forget one thing. In early 2021, Stripe held a valuation of $95 billion. So, it’s not all rainbows and butterflies for the world’s leading digital payment processor.

Also, with this much capital coming into the company, an IPO is less likely.

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What’s stopping a Stripe IPO?

While there’s a lot pointing toward a Stripe IPO in 2023, a few roadblocks could stop it from happening. Remember, this isn’t the first time rumors of the company going public have circulated. Last year, was full of similar buzz.

Here are some reasons 2023 may not be the year for Stripe to go public.

The company is expecting a large tax bill in 2023 from restricted stock units (RSUs) previously issued to employees. But with $4 billion in capital potentially on the way, it’ll have enough funding to cover its tax liability. An IPO isn’t needed for a cash influx.

It’s also likely that the company wants to find a replacement for Dhivya Suryadevara, its former chief financial officer who stepped down in February before finalizing plans for an IPO.

Perhaps most important is that it’s been rumored Stripe wants to become profitable before making shares available to the public.

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In 2022, Stripe processed $800 billion in payments but still lost $80 million. The company is forecasting adjusted earnings before interest, taxes, depreciation and amortization of $100 million in 2023 on $1 trillion in processed payments.

According to CNBC, the decision is in the hands of brothers and Co-Founders John and Patrick Collison. In January, they told employees they would decide by the end of the year to take the company public or let employees sell shares through a secondary offering.

The clock is ticking, and the public is paying close attention. While 2023 isn’t likely for an IPO, this is a developing story that’s worth paying attention to this year.

For Investors: For those wanting to invest in startups and pre-IPO companies like Stripe, they can. Thanks to changes in federal law, anyone can invest in startups. For example, Trubrain is creating wearable technology and supplement for anxiety and brain health. They have already raised nearly $3.5 million from retail investors.

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