Shulou(Shulou.com)11/24 Report--

According to news in the morning of March 7, Beijing time, US payments giant Stripe, one of the most highly valued start-ups in the world, recently told investors that it plans to use the latest round of financing funds to help pay about $3.5 billion (currently about 24.29 billion yuan) tax bills.

Stripe said it planned to raise about $2.3 billion at a valuation of $55 billion to cover withholding tax in the first quarter, according to a recently disclosed investor filing. Stripe plans to withhold another $500m in taxes later this year and another $700m next year.

Stripe also plans to spend $600 million to cover the tax costs associated with employee option exercise, according to a presentation provided to investors by Goldman Sachs. Stripe declined to comment on the news. Goldman Sachs has yet to respond.

The document describes the total amount of financing Stripe hopes to raise in the coming weeks. Stripe launched its fundraising in January, when it hired investment banks such as Goldman Sachs and JPMorgan Chase to help evaluate options such as financing and listing. In recent negotiations with investors, Stripe was valued at about $50 billion. By comparison, the company was valued at $95 billion in its last round of financing.

Throughout the financing process, Stripe has insisted that there is no need to raise cash to support day-to-day business operations. The main purpose of the company's financing is to solve the problem of employees'"double-trigger restricted shares". Over the years, Stripe has issued these restricted shares to attract and retain talent.

Usually, employees who are granted such restricted shares need to meet two conditions in order to cash in the stock. First of all, these restricted shares must already be owned by the employee. Second, employees need to wait for the company to complete liquidity activities such as an IPO before they can sell shares. In this case, the employee will face a high personal tax liability, but can be paid for by the proceeds from the sale of the stock.

Recently, however, capital markets have been closed for several months, making it difficult for Stripe to launch an IPO. At present, the company faces an urgent problem: unless the board gives up the second trigger condition for restricted shares, the restricted shares held by Stripe's early employees may expire soon. But if they do so, employees will suddenly face a higher personal tax burden and will not be able to pay taxes by selling shares.

Stripe has two goals in its latest round of financing: to raise enough money to pay the tax bills that early employees will face, and to organise a takeover offer to buy back at least some of their shares, according to the documents.

Stripe said in the filing that it processed $816 billion in payments last year and had revenue of $14.3 billion. The company's "pre-loss trading profit", a measure of net revenue, rose to $3.17 billion, accounting for 0.38 per cent of total trading volume. Competitor Adyen has only 17 basis points.

"the long-term trend in market share benefits Stripe and other technologically leading competitors," Stripe said in the document. "the growth of payments is not a zero-sum game."

Stripe also said it had won about 44 per cent of its own participation in new competition, with only 9 per cent of potential business going to competitors. The remaining 47% of the opportunities "are mainly based on prospects, or are unable to obtain reliable data on the final outcome".

The company also focuses on new businesses, including card issuance. Stripe's business competes with startups such as Marqeta to provide customers with the ability to carry out business card projects. Stripe expects the business to make a pre-loss trading profit of $127 million by 2024, up from $37 million last year.

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