According to eMarketer, about 8.7% of retail commerce all over the world is expected to be conducted online in 2016. While retail commerce is expected to grow 6%, online commerce is expected to grow much faster at 23.7% in 2016. The fast growth in online sales is the primary reason for the skyrocketing valuation of Billion Dollar Unicorn Club member Stripe, which facilitates payments over the Internet.
Stripe’s Journey
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. Recently, Stripe has added traditional merchants, such as Target to its client list. Today, it has users in 110 countries.
Stripe’s competitors include Braintree, which was acquired by PayPal in 2013; Dutch startup Adyen valued at $2.3 billion in 2015; and WePay.
Stripe recently launched a service called Radar that uses Stripe’s transaction data to detect fraudulent payments. It also launched Atlas to enable entrepreneurs all over the world to use American payment infrastructure and incorporate a business in the US.
Stripe’s Financials
Stripe is a venture funded company and does not disclose its financials. It has so far raised $440 million from investors including CapitalG, Visa, American Express, Peter Thiel, Elon Musk, General Catalyst, Sequoia Capital, Elad Gil, Redpoint Ventures, Chris Dixon, Aaron Levie, Khosla Ventures, Founders Fund, Allen & Company, Andreessen Horowitz, and Kleiner Perkins Caufield & Byers. Its last round of funding was held in November 2016 for $150 million when its valuation doubled to $9.2 billion. An earlier round in July 2015 for $90 million valued it at $5 billion. In December 2014, the company had raised $70 million at a valuation of $3.5 billion, having grown from a $1.75 billion valuation round held in January 2014.
