Case study · Europe
Checkout.com: what a 409A reset actually looks like
The situation
Checkout.com raised a $1 billion round in January 2022 at a $40 billion valuation, one of the largest private fintech valuations in Europe at the time. Fintech multiples then compressed sharply through 2022 as public comparables fell and growth-stage capital repriced across the sector.
How the deal worked
Rather than wait for a down-round primary raise to reset the number, Checkout.com's board lowered the company's internal 409A-style valuation directly — first to around $11 billion in late 2022, then again to $9.35 billion in 2023, a roughly 77% cut from the January 2022 peak. That reset wasn't primarily about outside investors: it reduced the strike price on new employee option grants, making them meaningfully cheaper to exercise than options struck near the $40 billion high.
In September 2025, with the business stabilized, Checkout.com ran an employee share buyback that valued the company at $12 billion — still far below the 2022 peak, but a real, company-funded liquidity event rather than another paper markdown, and evidence the board saw enough of a recovery to put cash behind it.
The outcome
Employees who joined or received grants after the reset benefited from a much lower strike price; those holding older, high-strike options faced years of being underwater before the buyback offered any real liquidity at all. The company itself has said it has no near-term plans to go public, treating periodic internal resets and buybacks as its liquidity mechanism instead.
What it teaches
A company's internal valuation isn't fixed — it can be cut sharply without any external funding round at all, purely through a board-approved 409A-style reset. See409A valuation for how that number diverges from what a secondary buyer actually pays, and why a markdown this large changes the economics for anyone holding options through it.
What to look for in a deal like this
- The size of the internal revaluation and what triggered it — a company marking its own shares down is unusual enough to be informative.
- Whether the recovery was validated by an external transaction or was the company's own assessment.
- How employees who were granted equity at the peak valuation were treated when the price was reset.
Frequently asked
Can a company lower its own valuation without raising money?
Yes. Companies periodically revalue shares for option-granting purposes, and a sharp internal markdown can happen without any new round. It affects the strike price of new grants and the reference price for buybacks.
What happens to employees who joined at a peak valuation?
Their options can end up underwater, meaning the strike price exceeds the current share price. Companies sometimes respond with repricing or fresh grants, both of which dilute existing holders.
Compare this with the other Europe deals in thecase-study index, or readwhy secondary sales happen for the motivation behind each deal shape. The glossary defines the terms used above.