Inside's Stripe's other big deal
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Illustration: Annelise Capossela/Axios
Stripe's planned acquisition of Bridge is not its first time spending big dollars on a deal. In 2021, Stripe paid $850 million to $900 million to snap up TaxJar, Axios has learned.
Why it matters: It's a rare glimpse into how the company, which has never disclosed the price of its acquisitions, uses M&A for expansion.
Catch up quick: Founded in 2013, TaxJar is a subscription business helping companies automate their sales tax filing process.
- It surged in 2021, when its annual run rate was growing rapidly, hitting $30 million to $40 million. It was raising a Series B and conducting "serious" acquisition talks with Shopify and Xero, per the sources.
- Stripe stepped in and offered a largely cash deal.
- Seed investors Bonfire Ventures and Daher Capital invested at an $11 million to $12 million valuation, the sources say.
- Insight Partners led its $60 million Series A at a roughly $175 million valuation.
- Shopify didn't respond to a request for comment, and Xero declined to comment.
Zoom out: At the time of the sale in mid-2021, TaxJar had about 200 employees, who all joined Stripe, according to announcements at the time.
- But Stripe was hit hard by the fintech downturn, and its valuation fell from $95 billion in 2012 to around $70 billion in recent secondary sales.
- It laid off an estimated 45 to 55 employees at TaxJar in mid-2022, with some invited to apply for internal roles at Stripe, per TechCrunch.
What's happening: The three who co-founded TaxJar have since left Stripe. Former TaxJar CEO Mark Faggiano and co-founder Matt Anderson both exited in mid-2022, and CRO Ryan Thompson left this past July, per their LinkedIn profiles.
- Despite those exits, TaxJar still exists as a product within Stripe, keying on small to mid-size U.S.-focused businesses.
- Stripe Tax is angled at businesses with international tax obligations as well.
The bottom line: Stripe isn't shy about big swings.
