Sequoia walks away from $21m investment due to conflict with Stripe

In a highly unusual move, one of Stripe's main investors has walked away from a $21 million (€18.5 million) investment in an online payments start-up, due to it being a rival of the company founded by Limerick-born brother Patrick and John Collison.

Sequoia, one of Silicon Valley’s most respected venture capital firms, last month led Finix’s $45 million Series B funding round. However, it later told the company that it intended to step away from the investment over a conflict of interest due to its previous investment in Stripe.

Sequoia returned their equity, board seat and information rights to Finix, which used a portion of the returned equity to raise an additional $10 million from backers. This brings total funds raised by the company in the past 12 months to more than $60 million.

"While we'd previously concluded that Finix was not a direct competitor to any existing portfolio companies, after making the investment we came across a variety of small data points that collectively painted a different picture of the market. This decision had nothing to do with Finix, and everything to do with Sequoia's desire to honour our commitments," said Pat Grady, a partner at Sequoia.

Irish data security company Getvisiblity raises €1.25m

---

I was a gig economy employee with a virus who couldn't afford to self-isolate

---

Why the EU’s new data strategy is noteworthy

---

Review: Raleigh electric hybrid bike helps with those hills

---

Richie Serna, co-founder and chief executive of Finix, thanked Sequoia for the speed with which it dealt with the situation.

“While the changes to our relationship with Sequoia were unexpected, we’ve never been more fired up about the future of Finix and our position in the market,” he said.

Analysts believe that Stripe’s recent link-up with the Canadian point-of-sale and ecommerce software provider LightSpeed may be linked to the conflict of interest as Finix is also a partner of the Montreal-headquartered company.

The news is more than a little embarrassing for Sequoia, which has backed companies that now have an aggregate public market value of more than $3.3 trillion.

Among the companies the VC has backed are Bird, DoorDash, Electronic Arts, Eventbrite, Google and PayPal.