Irish-American fintech Stripe valued at colossal $95 billion in latest private fundraise

Stripe, the fintech based in Dublin and San Francisco set up by two Irish brothers in 2010 has become the most valuable private company in the world outside of China. The payments processor that counts Google, Amazon and Uber among its clients secured the valuation when closing a new $600 million financing round.

Co-founders Patrick and John Collison were just 21 and 19 when they established the fintech 11 years ago. After last month appointing former Bank of England governor Mark Carney to its board, speculation was rife that Stripe was planning an IPO, possibly as soon as this year. However, given the timing and extent of its latest round of private financing, it now looks as if the company is happy to remain private for some time yet.

Stripe’s 50+ customers each use its technology solution to process over $1 billion in payments annually, between billing customers and receiving payment. At its last major capital raise and valuation back in September 2019, Stripe was worth $35 billion. That amounts to growth of over 170% in 18 months to this week’s $95 billion valuation. The fintech is now worth more than either Facebook or Uber before they went public.

Stripe said it will invest the new capital in further developing its European operations, which account for 31 of the 42 countries the company is active. Of the total $600 million raised, $50 million is being invested by Ireland’s sovereign wealth fund. Stripe is to create over 1000 new jobs in Ireland as it expands.

The fintech’s chief financial officer Dhivya Suryadevara commented:

“The opportunity ahead is much larger than when the company was started ten years ago.”

As more payments go online and cashless, Stripe finds itself as a leader in a quickly growing market. The company’s success has been founded on it identifying a gap in the market between self-hosted payment processing solutions like Authorize.net and branded third-party processors like PayPal or Google Wallet.

Another strength is that it had the foresight to build a “developer-first” product designed for easy integration into software applications, allowing payments to be accepted immediately. That has made it a favourite with technology companies and Silicon Valley, with growth fuelled by developer advocacy and relationship building.

Despite the youth of the Collison brothers when they founded Stripe, it was their second start-up. At 19 and 17 the pair co-founded auction management service Auctomatic alongside another two brothers, Harjeet and Kulveer Taggar, having been connected through the Y Combinator accelerator. It was quickly sold to Canadian domain names business Live Current Media for $5 million.

Just 2 years later, while studying at Harvard and MIT respectively, the brothers started work on Stripe. Their experience with online payments on platforms like eBay had led them to the conclusion that while it was becoming easier to build and launch an online business, payments solutions were lagging. They were hard to integrated from a technical point of view and getting approved as a merchant also time consuming and involving numerous manual processes.

For developers, legacy solutions lacked modern code bases and other resources like APIs, client libraries and fit-for-purpose documentation. A lack of tools available to developers left checkout experiences looking clunky and primitive compared to the intuitive elegance of the rest of a site’s user experience.

Stripe was their solution. It’s done well.