Stripe's Path to Public Markets: SPAC or IPO?

Stripe, a financial services unicorn with a $91.5 billion valuation, is considering going public through a SPAC or IPO in 2025. The company has remained private despite exceeding the market capitalizations of incumbent fintech businesses such as PayPal and Block. Fintech companies have taken different paths to public exchanges, including traditional IPOs and SPACs. However, SPACs have historically performed poorly, with one-year de-SPAC returns averaging negative 46.3% between 2012 and 2022.

Stripe, a financial services unicorn with a $91.5 billion valuation, is contemplating going public in 2025 through either a traditional Initial Public Offering (IPO) or a Special Purpose Acquisition Company (SPAC) merger. The company's decision to go public is significant, given its position as one of the most valuable private fintech companies, surpassing the market capitalizations of established players like PayPal and Block.

Fintech companies have taken diverse paths to public exchanges. Traditional IPOs involve engaging investment banks to underwrite the offering, while SPACs, or "blank check companies," provide a faster route to going public. However, SPACs have historically underperformed, with one-year de-SPAC returns averaging negative 46.3% between 2012 and 2022 [1].

Recent fintech IPOs have shown mixed results. For example, Robinhood Markets, which went public in 2021 using a traditional IPO, saw its shares surge by 192%, outperforming the S&P 500's 48% return. Circle and Chime, which completed IPOs recently, have had varying performances, with Circle's stock initially surging but since pulling back, and Chime's performance being relatively muted due to competitive pressures [1].

Stripe's decision to go public will hinge on strategic and operational factors. The company may consider the impact of Federal Reserve monetary policy, broader capital market sentiment, and investor appetites for public offerings. Additionally, Stripe might weigh the potential benefits of a faster and more flexible SPAC route versus the traditional IPO process.

For investors considering SoFi Technologies, it is worth noting that the Motley Fool Stock Advisor team did not include SoFi in their top 10 stocks for 2025, highlighting the need for careful evaluation [1].

References:
[1] https://finance.yahoo.com/news/stripe-spac-ipo-2025-114500536.html
[2] https://seekingalpha.com/article/4804756-us-ipo-niq-flops-accelerant-shines-7-ipo-week