Flourishing fintech Stripe recently concluded their most recent round of funding, securing a
further $600mn and pushing their valuation to an eye-watering $95bn- securing them the
title of Silicon Valley’s most valuable private company.
This comes after their series ‘H’ funding round, which attracted a host of institutional
interest, with the likes of Allianz, Axa and Fidelity weighing in on the ‘unicorn’ in hopes of
adding long term value to their portfolio’s.
CEO Patrick Collison commented that the $600m would be used to spearhead growth in
Europe by expanding their payment network whilst also hoping to strengthen their HQ.
Stripe are experienced, having utilised previous funding for similar reasons, evident in their
expansion into Africa; this resulted in the strategic acquisition of Flutterwave, a growing
African payment processing firm who hope to drive growth in the African E-commerce
space. Whilst the acquisition also gave Stripe an international presence, it also created
significant growth opportunities given that 200mn African’s don’t have access to a bank
account.
Launching in 2010, Stripe provides simple and cost-efficient payment processing solutions to
E-commerce stores. As the E-commerce sector has grown, so have Stripe, processing
between $200bn and $250bn in payments in 2019, generating $450mn profit. In 2020, they
onboarded a further 200,000 users as physical stores were forced online due to COVID-19,
claiming to process 5000 transactions a second throughout the year.
(PYPL Blue, SQ Grey)
Whilst Stripe remains private, their publicly listed competitors PayPal and Square have had a
phenomenal period of growth since their lows in March 2020, evident in the chart above.
Although this is no doubt fuelled by the vast amounts of quantitative easing, both PayPal
and Square operate robust business models, fast-moving which were pivotal in the transition to online shopping, justifying their share prices to an extent.
Although they are no plans for Stripe’s IPO yet, it raises the question of whether they will
come to market or not- especially as they have no issues raising capital. In a fast-moving
fintech sector, Stripe is definitely worth watching very closely.