Stripe has become the most valuable private company Silicon Valley has ever produced, after investors struck a deal appraising the online payment processor at $ 95 billion.
Participants in Stripe’s most recent funding, which raised $ 600 million in new shares, include the National Treasury Management Agency of Ireland, Allianz, Fidelity, Baillie Gifford, AXA and Sequoia Capital.
Founded in 2010 by Irish brothers Patrick and John Collison – now aged 32 and 30 – Stripe’s rating has almost tripled in less than a year, surpassing those achieved by Facebook and Uber before they went public.
The company’s valuation reflects a boom in e-commerce and digital payments activity that boosted the values of rivals listed as Adyen and Square, as well as Checkout.com, a London-based payments start-up that was valued at $ 15 billion in January.
However, some investors have questioned the sustainability of high technology valuations, as rising inflation expectations send waves into the US bond market and the launch of vaccines accelerates the reopening of blocked economies.
The Biden government’s $ 1.9 trillion stimulus project also attracted investors to sectors of the “old economy”, such as banks and industries.
Stripe took advantage of the growth wave of e-commerce, with more than 200,000 new companies in Europe signing up to the platform since the pandemic began. John Collison said his systems handled nearly 5,000 requests per second in 2020, including payments, refunds, customer data checks and other queries in his application programming interface.
“Stripe itself is now bigger [by payment volumes] than the entire e-commerce market was when we started working on Stripe, ”he added.
200,000
Number of new companies in Europe that have joined the platform since the start of the pandemic
Former Bank of England governor Mark Carney and Christa Davies, Aon’s chief financial officer, joined Stripe’s board earlier this year. The company also brought Dhivya Suryadevara from General Motors as chief financial officer.
Despite the new CFO and board members, whose appointments are often seen as precursors to a public listing, Stripe has chosen to remain private at a time when many other technology companies are going public.
Staying away from public markets allowed Stripe to maintain strict control over financial details; did not disclose revenue or profitability.
However, a person close to the San Francisco-based company said that it handles a larger volume of payments than its European rival Adyen, which has a market capitalization of € 60 billion and processed € 303.6 billion in 2020.
Stripe’s most recent funding will fuel its expansion in Europe, including a plan to hire 1,000 more people at its Dublin office over the next five years and support upcoming launches in Brazil, India and Indonesia later this year.
Previously, investors valued Stripe at $ 35 billion in September 2019, before adding $ 600 million to that funding when the pandemic spread last April.
The Collison brothers founded Stripe after leaving Limerick for Silicon Valley to sell their first company, a tool for eBay sellers called Auctomatic, for more than € 3 million in 2008. This business turned the then teenagers into millionaires.
Early investors in Stripe included PayPal founders Elon Musk and Peter Thiel, as well as the influential Silicon Valley start-up accelerator, Y Combinator.
Today, Stripe’s valuation is higher than the $ 80 billion mark Facebook received from private secondary deals before its initial public offering in 2012. Uber’s valuation rose to $ 72 billion before its IPO in 2019.
Stripe headquarters in San Francisco. Co-founder John Collison said the online payment processor processed nearly 5,000 orders per second in 2020 © David Paul Morris / Bloomberg
Stripe also overtook Elon Musk’s rocket company, SpaceX, which briefly became the largest venture capital-financed company in the United States, after investors valued it at $ 74 billion last month. Globally, it is second only to ByteDance, the $ 180 billion Chinese parent company of TikTok, and Ant Group, the fintech company that was forced to postpone its listing last year.
Stripe, which keeps a portion of each transaction in its processes, started selling payment services to developers at other technology start-ups, which allowed it to hitch a ride at some of the world’s fastest growing companies.
Customers now include enterprise software companies Zoom, Salesforce and Atlassian, and e-commerce services Shopify, Instacart and Deliveroo, as well as Facebook-owned Uber and Instagram.