Stripe brothers set for multi-billion windfall

The Irish brothers behind Stripe are poised for a billion-pound windfall each after hiring bankers for a stock exchange listing.

John, 32, and Patrick Collison, 34, told staff at the financial services company this week they had set a 12-month goal to either go public or allow employees to sell stock in a private market transaction.

Based in San Francisco with offices in Dublin, Stripe has enlisted Wall Street giants Goldman Sachs and JP Morgan to help explore these options.

The company – founded by the Collison brothers in 2010 – processes payments for other internet companies and last raised venture capital in March 2021, a £485m round that earned it a high £77bn valuation from investors.

According to Forbes estimates, each brother owns a 10 per cent stake, meaning that if Stripe opts for a direct listing, the co-founders could collect more than £7bn if they sold all of their shares.

But reports suggest the company’s valuation was downgraded last year due to a broader tech sell-off and recession fears, sending its internal valuation down to around £48bn.

In November, Stripe laid off 14 percent of its employees, with the Collison brothers stating that the company was “overhired for the world we’re in.”

Stripe’s board consists of former Bank of England governor Mark Carney and Christa Davies, chief financial officer at services giant Aon. It is clear that the company is not looking for a traditional IPO as it does not need to raise additional capital and will instead opt for a direct listing. In a direct listing, employees and investors sell their existing shares to the public and the market determines the price. The move would allow employees to cash in on stakes in the private company.

The news comes as stock markets continue to stagnate. According to Ernst & Young’s IPO report, IPO activity fell 45 percent in 2022 compared to the previous record year. Markets have been penalized by inflation concerns and lingering geopolitical uncertainty, which Sophie Lund-Yates, principal equity analyst at Hargreaves Lansdown, says is still holding management teams back from floating.

Earlier this month, however, reports circulated that British semiconductor company Arm may be considering an IPO, with a possible dual listing in London and New York.

Danni Hewson, financial analyst at AJ Bell, said: “Arm’s potential listing has had investors’ mouths watering and previous tantalizing speculation that Stripe might be ready to make the jump attracted a lot of interest.”