It is a well established fact, that the global economy is in a turmoil like never before. The IMF has already termed the current economic situation as ‘The Great Lockdown’, and has cautioned it to be the next worse thing after the great depression. Startups are even harder hit, with most of them announcing pay cuts, lay-offs and furloughs.
But despite all of this, certain deserving companies are still raising money. Companies who have proven to have business models that can weather such storms are primarily the ones wherein VCs are placing large bets. One such company is Stripe, and it has announced raising of an additional $600 million in its Series G, at a $36 billion valuation.
The capital is coming in from investors including Andreessen Horowitz, General Catalyst, GV, and Sequoia. The financing takes place on the same terms and valuation as the Series G.
The time is pretty ripe for companies such as Stripe. There is a forced conversion for consumers, wherein they are being required to switch to online from offline mode, as social distancing and lockdowns take priority amid coronavirus pandemic. And among that offline-to-online push, payments and fintech is one area that has seen rapid expansion. Stripe is looking to bank on that surge in demand, and the investors seem to have taken to that bet too.
“While the full economic impact of COVID-19 remains uncertain, several years of offline-to-online migration are being compressed into several weeks. The current disruption underscores the need for reliable, easy-to-use infrastructure for internet businesses.”, said Stripe in a prepared statement.
The capital raised would be deployed at multiple levels. Stripe plans to invest further in growing its platform, including a rare continuity in global hiring, deepening its stack of software functionality to simplify online business; accelerating its geographic expansion (with upcoming launches in Bulgaria, Cyprus, the Czech Republic, Hungary, Malta, and Romania); and pursuing strategic initiatives or acquisitions, “no matter the climate”.
Additionally, Stripe also said that it has a comfortable $2 billion on its balance sheet, a decent cushion for the company of its scale, to tide through the current scenario. The company will also continue its investments in other startups, which it has done time and again.
According to data available on Crunchbase, the payments giant has raised around $1.6 billion till date, including this new investment.
