Digital payments giant Stripe announced on Wednesday, that it has signed agreements to raise a staggering $6.5Bn in its Series I funding round. This new round attracted investment from some of the marquee names in the investment world, including Singapore’s sovereign wealth fund GIC, Goldman Sachs Asset and Wealth Management, and Temasek.

While the above come as new investors in the digital payments processor, existing shareholders such as Andreessen Horowitz, Baillie Gifford, Founders Fund, General Catalyst, MSD Partners, and Thrive Capital take part in the round as well. This development also comes months after Stripe cut its internal valuation to $74 billion (in July) before further lowering it to $63 billion. Last year, the startup’s actions reflected a difficult period for tech companies globally (owing to a rise in inflation and interest rates amidst an adverse macroeconomic environment) as it laid off 14% of its workforce in November 2022

The latest round of funding puts the valuation of the 13-year-old Stripe at $50 billion, nearly half of the $95Bn it commanded back in 2021. Despite the devaluation though, this large quantum size in fundraise will act as a confidence building measure, specially since it comes amidst an economic environment that is making it challenging for firms to raise funds. Investors are tightening their purse strings and adopting a more cautious approach. Goldman Sachs served as the sole placement agent on the transaction, while J.P. Morgan acted as the financial advisor.

According to Stripe, the proceeds from the latest funding round will be deployed towards providing liquidity to both current and former employees, as well as addressing employee withholding tax obligations related to equity awards. According to the fintech giant, this will result in the retirement of Stripe shares that will offset the issuance of new shares to Series I investors. It added that it does not need the proceeds from the funding round to “run its business.”

“Over the last 12 years, current and former Stripes have helped build foundational economic infrastructure for millions of businesses around the world, and this transaction gives them the opportunity to access the value they’ve helped create,” said John Collison, co-founder and President, Stripe. “But the internet economy is still young, and the opportunities of the next 12 years will dwarf those of the recent past. There’s so much to discover and to create. For us, it’s now back to work.”

Stripe’s platform allows businesses to accept payments online and process them quickly and securely. Its clients include some of the biggest names in tech, such as Amazon, Google, and Facebook, as well as a growing number of smaller businesses. In its official statement, the firm noted that its business boomed since 2019 owing to an unprecedented shift to the digital mode in recent years, while simultaneously clocking strong momentum with startups. Today, 100 businesses handle more than $1 billion on Stripe annually, while over 70% use Stripe to manage operations across multiple countries.

Nonetheless, the successful fundraising round by Stripe in such a difficult economic environment is a clear demonstration of the continued investor interest in fintech companies. With the ongoing shift of businesses and consumers to online platforms, the demand for online payment processing services is expected to increase significantly, further driving the growth of companies such as Stripe.

“Stripe is a world-class, founder-led company recognized for its durable and scaled payments business, with newer products, like Issuing, Billing, and Tax, that have the potential to be powerful accelerators to growth over time. We are proud to partner with Stripe to support the company’s continued success over the long term,” said Gregg Lemkau, co-CEO of BDT & MSD Partners.