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Stripe Inc. said Wednesday it’s providing liquidity to current and former employees in a so-called private-IPO transaction valued at $65 billion.
While the “private initial public offering” may appear to be an oxymoron, it’s a term that bankers have been using to allow insiders to sell shares as the IPO market remains muted.
Read more: IPO freeze gives way to cautious optimism as dealmakers see signs of a thaw
In this case, Stripe investors Sequoia Capital and Goldman Sachs Group Inc.’s
GS,
Goldman Sachs Asset Management’s growth-equity unit are buying at least $1 billion in stock from insiders.
Stripe’s valuation has climbed by $15 billion to $65 billion in the past year, a Stripe spokesperson said. The company had been valued as high as $95 billion in 2021, according to reports.
Chris Sugden, managing partner of Edison Partners, a growth-equity firm that invests in the fintech sector, told MarketWatch he’s been seeing activity pick up around private IPO stock sales because the window for initial public offerings remains challenging.
Also read: IPO market continues its revival with investors looking to Amer Sports, BrightSpring — and Reddit
Interest in fintech has been increasing as the business improves, and stocks such as Robinhood Markets Inc.
HOOD,
and SoFi Technologies Inc.
SOFI,
have posted solid gains.
“The rally we’ve seen in those stocks is still well below 2021 levels, but you’re seeing interest,” Sugden said. “This isn’t 2021 that was related to speculation on crazy growth. This is more in line with fundamentals that are more supportive of where valuations are.”
Stripe has been perennially mentioned as a candidate for an initial public offering. At a valuation of $65 billion, it ranks as a significant player in the space.
The Wall Street Journal initially reported the climb in valuation for Stripe.
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