Is Stripe Ready To List?

Analysts expect the global e-commerce payment market to reach $135 billion by 2022. A huge beneficiary of this trend is Billion Dollar Unicorn Stripe, which facilitates payments over the Internet.

Stripe’s Offerings

San Francisco-based Stripe was founded in 2010 by brothers John and Patrick Collison. They wanted to set up an online platform to simplify the process of accepting payments for websites and apps. It enables companies to set up credit card processing capabilities on their digital pages by just embedding a simple code.

It soon became popular with several new age startups like Lyft and eyeglasses retailer Warby Parker that wanted to avoid the pain of tying up with banks for online transactions. Today, its clients include over 100,000 businesses including Target, Facebook, Amazon, Pinterest, Wish, Opentable, Blue Apron, Shopify, Reddit, Affirm, and TaskRabbit.

Over the past few years, it has also expanded its offerings to include additional services such as Atlas, a program that helps entrepreneurs launch their own Internet businesses and Stripe Radar, an anti-fraud tool for big businesses.

Stripe’s Financials

Stripe earns revenues by charging a transaction fee of 2.9% of the transaction value plus a commission of $0.30 per transaction. It does not report its financials, but analysts use its pricing structure to estimate its revenues at $450 million for 2015. Analysts estimate its revenue is about $1.5 billion in 2017. Its profitability status is still not known. It has expanded internationally and has a presence in the Asian markets.

Stripe is venture funded so far with $440 million raised from investors including Capital G, Visa, Thrive Capital, Khosla Ventures, Founders Fund, General Catalyst Partners, Sequoia Capital, Allen & Company, Y Combinator, SV Angel, Aaron Levie, Chris Dixon, Elad Gil, Peter Thiel, Elon Musk, and Andreessen Horowitz. Its valuation has been steadily increasing. Its last round of funding was held in November 2016 when it raised $150 million at a valuation of $9.2 billion. Prior to that, a July 2015 round had valued it at $5 billion.

Stripe’s competitors include Braintree, which was acquired by PayPal for $800 million in 2013; Dutch startup Adyen that is trying to go public at a valuation of $8.3 billion with a revenue of $1.14 billion in 2017 and profitability since 2011; and WePay that was acquired for $400 million by JP Morgan Chase in 2017. On the other hand, bigger rivals like Square focuses on processing in-person sales at retailers, Google and Apple focus on smartphones, and some companies like Alibaba have customized platforms. Even legacy payment processors like Chase Paymentech, First Data that work with large, traditional retailers are also upping their game with modern technology.

While in 2016, Stripe’s valuation was seen as quite high, its deal last year with Amazon has now justified its valuation. Couple of years back, Stripe maintained that is in no rush to list. It believes that a company should go public once it has attained a point of stability.

Looking For Some Hands-On Advice?

For entrepreneurs who want to discuss their specific businesses with me, I’m very happy to assess your situation during my free online 1Mby1M Roundtables, held almost every week. You can also check out my LinkedIn Learning course here, my Lynda.com Bootstrapping course here, and follow my writings here.