Payments fintech Stripe preparing for $100 billion direct listing

Stripe, the digital payments system founded in San Francisco in 2011 by two Irish brothers, has started to put things in place for a direct listing that market analysts expect to see the company valued at over $100 billion. Both founders, who grew up in the village of Dromineer in Co Tipperary, are still in their thirties and stand to become multi-billionaires.

The company has reportedly started the process of hiring advisors to put things in place for a direct listing tipped to happen sometime next year. Former Bank of England governor Mark Carney recently joined the Stripe board.

Founders Patrick and John Collison are serial entrepreneurs, having already sold a company that developed software for eBay sellers for $5 million before dropping out of degrees at MIT and Harvard to set up Stripe aged just 21 and 19 respectively. Their current stakes in Stripe are thought to be worth over $10 billion each.

The fintech start-up’s stated ambition to “increase the GDP of the internet”, impressed early backers that included Paypal co-founder Peter Thiel and Elon Musk, who also had his first major entrepreneurial success at Paypal before moving on to Tesla and SpaceX.

Stripe’s payments software makes it cheap and easy for small and medium-sized businesses to accept online payments and is used for hundreds of billions in transactions a year for businesses that include Google. Amazon and Uber. It charges a transaction fee of 3% in the USA and 1.9% in Europe.

Stripe’s rate of growth has rocketed in the past year and a half as the Covid-19 pandemic accelerated the move to a digital economy and e-commerce. The fintech prefers to go public via a direct listing, which allows the market to find the company’s share price directly rather than a price being set via an IPO, because, already profitable, it does not need to raise investment.

The listing will allow employees and those who have invested in Stripe as a private company, to more easily cash in on their shareholdings should they choose to do so. Because the fintech resisted the temptation to float this year, despite the positive market conditions for new technology listings, some staff and early investors have been allowed to liquidate some of their stakes by accepting private offers.