Stripe’s rise has been meteoric. After its recent round of funding, Stripe has become the most valuable startup in the US with a valuation of $95 billion. In just a couple of years, the payments company has tripled in value and has reached levels within the reach of very few companies.
To give us an idea, Stripe’s latest valuation exceeds the level Facebook had before going public, around 80 billion, and is above the latest value of SpaceX, at around 74 billion. With the exception of Chinese giants such as ByteDance and Ant Group, these numbers make Stripe the largest private company in the world.
Why is Stripe so highly valued? Here we take a look at their latest successes, what they offer and what other companies they work with. A giant that has remained in the background in recent years but where this latest round of funding puts them squarely in the fight against the tech giants we all know.
Stripe’s origins date back to 2020, when John and Patrick Collison, two Irish brothers, decided to found Stripe in San Francisco. Since then, the company’s growth has been steady, with major funding rounds in 2018, 2020 and finally this latest one announced today for $600m and aimed at helping expand Stripe across Europe.
Stripe continues to strive to become the most widely used payment gateway in the world, not only for end users, but also in the corporate market. Stripe can be seen as a company that helps others to manage payments. So far they have worked with small and medium-sized companies, but their focus is now on large companies.
According to Dhivya Suryadevara, Stripe’s CFO, Stripe processes hundreds of billions of dollars in payments every year, with a presence in 42 countries.
By 2021, Stripe intends to “double its business capabilities” with the incorporation of clients such as Twilio and Zapier. Companies that will join Deliveroo, Doctolib and the N26 bank, which already use Stripe to manage payments.
The boom in e-commerce due to the pandemic has meant an added boost to the success of Stripe, which is already in all the pools as the next startup that will decide to go public, although they have publicly denied the rumours for the moment.
Stripe has more than 2,500 employees and 14 international offices. It is headquartered in San Francisco and Dublin, and one of its goals from the latest round of funding is to create 1,000 jobs in Ireland.
The great benchmark in the fintech world alongside Paypal
Stripe offers a large number of services. Stripe is often referred to as the great benchmark in the fintech world and one of the companies that can challenge the way traditional banking works. As defined by the company itself, Stripe enables “companies of all sizes to accept payments and manage their online business with its software”. The company offers everything from a payments platform, revenue management applications and a cloud infrastructure. Through Stripe, a company can manage payment options such as Google Pay, transfers, card payments, remittance of funds or tokenisation from a single system.
According to the company, Stripe supports more than 135 currencies and payment methods and handles more than 250 million API requests per day.
In December 2020, Stripe announced Treasury, a tool to “solve traditionally more complicated processes in an instant” such as opening a bank account. To do this, they teamed up with Goldman Sachs and Evolve Bank in the US.
Through Treasury, other companies such as Shopify could offer their users access to loans, credit and debit cards.
Stripe’s customers include companies of all types. A first group are e-commerce companies. Here Stripe collaborates with companies such as Glovo, Chicfy, Under Armour, We Are Knitters or elparking.
In a second group are B2B platforms such as Shopify, Squarespace, Booking or DocuSign, which have teamed up with Stripe to improve their payment system. We also have software-as-a-service companies such as Typeform, Freepik or Dashlane, or transport or food vendors such as Lyft, Deliveroo or Instacart.
According to Stripe, the company has added 200,000 businesses in Europe since the start of the pandemic. The fintech company that comes closest to Stripe in valuation is Robinhood, the app that found itself in the middle of the chaos with GameStop, and is valued at about $11.7bn, according to CNBC.
“We are investing in the infrastructure that will drive online commerce in 2030 and beyond,” says Dhivya Suryadevara. An ambition that points to the next decade but where already today it is enough to generate significant revenues, based mainly on the commission of up to 2.9% + 0.25 cents that it applies on transactions made.