Stripe Raises $6.5bn Downround, Joins With OpenAi On GPT4
Stripe is quick to point out that its business doesn’t need this money to run. Instead, it will give cash to its employees, both past and present, after its value dropped by almost 50%.
One of the biggest fintech companies in the world, Stripe, has raised a huge $6.5bn funding round.
You did read that correctly. $6.5bn.
Before 2021, when it raised $600 million in a Series H round, the company was worth $95 billion. This latest cash injection was made at a valuation of $50 billion, which means that the company has now officially chosen a “down round.”
Stripe is quick to point out “does not need this capital to run its business,” according to a press statement.
It says that the huge amount of money will be used by the business to fix some problems that are starting to come up with employee equity packages.
More specifically, the cash will give current and former employees access to cash and pay for “tax obligations” that employees withheld. Then, these Stripe shares will be sold to pay for the new shares that will be given to the Series I investors.
“Over the last 12 years, current and former Stripes have helped build foundational economic infrastructure for millions of businesses around the world, and this transaction gives them the opportunity to access the value they’ve helped create,” said John Collison, cofounder and president of Stripe.
“But the internet economy is still young, and the opportunities of the next 12 years will dwarf those of the recent past. There’s so much to discover and to create. For us, it’s now back to work.”
Existing Stripe investors, like Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital, as well as new investors like GIC, Goldman Sachs Asset and Wealth Management, and Temasek, took part in the round.
Stripe has also made a new deal with OpenAI, the company that owns ChatGPT. This week, OpenAI announced ChatGPT 4, its newest product.
OpenAI will now use Stripe’s payment platform as it moves toward making money off of the 100 million people who use its generative AI services I ChatGPT and DALLE. OpenAI’s GPT-4 will also be added to Stripe’s products and services.
“We’re excited to work with Stripe to monetize our flagship products,” said Peter Welinder, vice president of product and partnerships at OpenAI. “Beyond payments, Stripe is helping us with everything from recurring billing and tax compliance to automating our financial operations.”
