Scottish Mortgage and Baillie Gifford US Growth have continued clawing back losses from the recent tech sell-off after receiving a boost from online payments processor Stripe which has become Silicon Valley’s most valuable private company.
Stripe, founded by Irish brothers Patrick and John Collison in 2010, announced on Sunday it had raised $600m from its latest funding round, with Baillie Gifford, Fidelity, Allianz, Axa and Sequoia Capital among the investors ponying up cash.
The e-commerce company is now worth $95bn (£68bn), three times higher than its $35bn price tag last April.
This makes it the most valuable private company to come out of Silicon Valley, according to the Financial Times, with its valuation surpassing Facebook and Uber before they went public and Elon Musk’s rocket company SpaceX, which was the largest US private company last month after it was valued at $74bn.
Scottish Mortgage and Baillie Gifford US Growth shares buoyed
Stripe’s soaring valuation is a spot of good news for Scottish Mortgage and Baillie Gifford US Growth, two of the Edinburgh manager’s largest trusts, which have seen their share prices hammered in the recent tech sell-off.
Shares in both trusts were up over 1.7% at the time of writing with Scottish Mortgage hitting 1,168p and Baillie Gifford US Growth smashing 328p.
This is up considerably from a week ago when both funds were down 30% from their mid-February highs as their punchy holdings in Tesla and tech giants like Amazon slumped amid fears of rising bond yields and inflation. Since then they have recouped some losses, with Scottish Mortgage up 11% and Baillie Gifford US Growth up 21%.
See also: Can Baillie Gifford endure a long-term value rally?
Scottish Mortgage, run by James Anderson (pictured) and Tom Slater, owned a 0.3% stake in Stripe at the end of March, according to the trust’s last annual report, which it valued at £29.6m. The £16.4bn trust’s interim report shows that had increased to 0.8% of NAV by the end of September and was worth £124.5m.
The £980m Baillie Gifford US Growth has an even punchier position in the online payments processor. Managers Gary Robinson and Kirsty Gibson scooped up a stake in Stripe in January 2020 and by the end of the trust’s financial year in May, it was just outside the top 10 holdings at 2.2%. By the end of November, it was worth £19.2m and made up 2.4% of the trust’s then £810.3m total assets.
Robinson has said that cloud-based infrastructure companies like Stripe could rival the Faangs in the next decade.
See also: Baillie Gifford American managers join James Anderson in slashing Tesla holding
