Thrive Capital, the investment firm founded by Joshua Kushner, cites a potential investment in payments provider Stripe at a valuation of $55 billion to $60 billion, a sharp drop from two years ago, two people with knowledge of the matter said.
Stripe aims to raise around $2.5 billion, one of the people said. Thrive has pledged $1 billion, said another person familiar with the situation, who asked not to be identified because the talks are confidential.
If the funding closes, the funding could give Stripe some breathing room amid a tough public listing market. The money will be used to pay off the start-up’s tax debts and enable its employees to sell their shares in the company. Many privately held tech companies use stock options to recruit employees, but a faltering public offering market has made it difficult for employees to monetize those shares. Some Stripe employees have stock grants that will expire next year if the company doesn’t go public or raise new funds, a person familiar with the situation said.
The Wall Street Journal previously reported that Stripe had considered raising new funds.
Stripe’s moves are under scrutiny because it was once the highest-rated private company in the United States. How it reacts to an inhospitable market for public offerings could be a harbinger of how others will deal with it.
Founded in 2010 by brothers John and Patrick Collison, the company hired Goldman Sachs and JPMorgan Chase to advise on a possible IPO next year. It told employees last week that it was considering several options to cash out its employees within 12 months.
Options include listing Stripe’s shares on the public market. Another option is to raise funds privately, followed by a Takeover bid, in which the company would sell employee shares to other investors while maintaining privacy. The new funding doesn’t mean a public listing is off the table, said one of those familiar with the matter.
A valuation of $55 billion to $60 billion would be a sharp drop for a company that last raised money in 2021 with a valuation of around $95 billion. Stripe sells payment processing software to companies like Peloton, Wayfair, and Amazon.
Over the past year, the environment for start-up financing has deteriorated amid rising interest rates and a renewed focus on profits. Some tech companies have had a harder time attracting new investment, and many startups have had to cut costs.
For Thrive, known for its investments in startups like skims, Warby Parker and SpaceX, a $1 billion bet is a big check. Mr. Kushner has tries to lead the company out of the shadows his older brother Jared, who was a top advisor to his father-in-law, former President Donald J. Trump.
Thrive closed a $3 billion fund last year, its largest ever. last week, it announced that it had sold a minority stake in the company to executives including Disney CEO Robert Iger and Henry Kravis, co-founder of private equity firm KKR. The deal valued Thrive at $5.3 billion. It is also in conversations to invest in the AI company OpenAI.
Erin Griffith contributed reporting.
