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Fintech Winter Continues as Stripe’s Valuation Tumbles

Fintech Winter Continues as Stripe’s Valuation Tumbles

  • Published: 15th July 2022

Fintech companies are going through their toughest period as growth slows. In the past few months, many of the best-known fintech firms have seen their valuations crash by as much as 80%. 

Stripe valuation crashes

Stripe, one of the best-known fintech companies, slashed its sky-high valuation by 28%. The company, which was previously valued at over $95 billion, now estimates that it is valued at about $67 billion. Wall Street Journal was the first to report, citing the company’s 409A filing with the SEC.

For starters, Stripe is a company that helps some of the biggest companies in the world process their payments. Some of its top customers are firms like Instacart, Shopify, Lyft, Slack, and Google. It charges a small fee for all transactions it processes.

Stripe has seen exponential growth in the past few years helped by the billions it has raised from investors like Sequoia Capital, Angel Investors, and even Elon Musk. Further, the privately held company has also grown via acquisitions. It acquired companies like Paystack, Index, PayMongo, Balance. It has also invested in Monzo

Fintech winter continues

News of Stripe’s low valuation came after another valuation cut by Klarna, one of Europe’s biggest fintech firms. Once valued at over $45 billion, the firm is now raising capital at a valuation of less than $7 billion.

The same trend has happened in public markets. For example, PayPal’s valuation has slipped from over $300 billion in 2021 to about $80 billion. Similarly, Block, formerly known as Square, has seen its valuation slip from over $125 billion to $36 billion. 

Other fintech companies that have seen their valuation slip are companies like Remitly, Shift4Payments, and Nu Holdings. 

Notably, companies in the money transfer industry have struggled as investors anticipate a slowdown in the industry. This includes companies like Western Union, Wise, and Euronet Worldwide.

Crispus Nyaga

Crispus Nyaga is a full-time financial analyst and trader with more than 7 years in the industry. He has been fortunate to work for several fintech companies, mostly from Europe, Asia, and North America. His work is published in leading platforms like Seeking Alpha, Invezz, rkdream.com InvestingCube, Capital.com, and Marketwatch. Crispus operates from a private office in Nairobi.