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Stripe is reportedly exploring going public in what may become the largest tech startup initial public offering (IPO) in recent years.

According to the Wall Street Journal, co-founders Patrick and John Collison told employees that the business plans to go public or allow employees to sell shares through a secondary offering over the next 12 months.

Stripe is said to have engaged Goldman Sachs and JPMorgan Chase to advise on both possibilities, indicating that the reported plans are more than wild speculation. Stripe, founded in 2010, handles payments for customers and provides supplementary services to e-commerce clients.

The problem with going public

The Wall Street Journal suggests that Stripe may allow its employees to sell their shares on the secondary market instead of going public. The backup plan is due to high inflation, high interest rates and fears of a global recession, which have nudged many companies to delay or scrap IPOs in recent months.

A report from PitchBook-NVCA Venture Monitor indicates that venture capital funding is slowing down in the US. According to PwC, there were only 93 traditional US IPOs in all of 2022, an enormous decline from 2021.

Value concerns

Stripe raised $600 million in venture capital on a $95 billion valuation in March 2021. The valuation declined to $74 billion in July and $63 billion earlier this month. If it were to opt for an IPO, Stripe would likely wait for the market to stabilize.

Despite unfavourable conditions, the organization has been expanding rapidly by adding new services like chargeback protection, cash advances and corporate credit cards.

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