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Editor’s note: This article was originally published on April 20, 2021. Since then, has surpassed Stripe as the most highly valued private company in the U.S.

Payments processing startup earlier this year became the most highly valued venture-backed private company in the U.S. and the third most valuable in the world when it was valued at $95 billion in its Series H funding round.听

Its No. 3 placement on the is just behind Chinese financial services giant , valued at $150 billion, and , the world鈥檚 most highly valued unicorn with a reported valuation of $180 billion in a financing round in late 2020 led by and .听听

Given Stripe’s status as the U.S.鈥� most highly valued venture-backed private company, and its pivotal role in e-commerce, we decided to take a peek under its hood and use SA国际传媒 data to understand the business a bit better. That includes taking a closer look at the competitive landscape Stripe faces, its status as the most active private company investor, and its prospects for a public-market debut in the near future.听

Stripe, founded by brothers and in 2010, has raised 10 equity funding rounds鈥攑acing at almost one funding per year鈥攆rom its pre-seed round in 2010 to its most recent, a $600 million Series H round that valued the company at $95 billion. In total, Stripe has from 39 investors.听

The Collison brothers grew up in a small town in Ireland and moved to the U.S. to study. As a result, the company has a strong footprint in Europe and the U.S. and is co-headquartered in San Francisco and Dublin.听

This is the brothers鈥� second startup. They previously co-founded and sold it for $5 million in 2008 to .听

Investors in Stripe

Investors that at the earlier stages in Stripe are (Series A), (Series B) and (Series C).

Sequoia Capital, which first invested in Stripe鈥檚 seed round, remains the most consistent investor over time. listed on rounds include and , who invested at seed; Series A investors and ; and and investing at Series B. (All 40 investors in Stripe are , including investors in a secondary financing.)

It鈥檚 worth noting too that those six angel investors in Stripe have made overall in the last five years, according to SA国际传媒 data, which include 39 investments in financial services, and with 16 of these funding rounds in unicorn companies.

Stripe鈥檚 business

Stripe processes hundreds of billions of dollars per year in transactions. It charges 2.9 percent of total transaction value and 30 cents for each payment transaction.

In other words, for each $100 billion in transaction value, Stripe earns $2.9 billion鈥攂efore adding in the per-transaction fee. The company generated $7.4 billion in revenue last year鈥攗p 70 percent year-over-year, the Wall Street Journal last week, citing sources familiar with the matter.听

Stripe has expanded beyond payment processing software and e-commerce APIs for developers. It now also has an in-store point-of-sales device called Terminal and has built out subscription-based payments and invoicing. It also provides its customers with lending and card issuing services as well as fraud and risk management and custom reporting.听

Stripe鈥檚 customers include large tech companies such as , , , ,, , and .听

Investments and acquisitions

Stripe has made , per SA国际传媒 data, ranging from technology around in-store payments to chat, marketing and identity management. Its most recent acquisition was of Nigeria-based , which it acquired last fall for $200 million to expand into Africa for payments. Stripe also acquired in-store payment company in 2018 to compete for market share in physical stores.听

We expect Stripe to continue to be acquisitive, given the geographies it supports, its focus on broadening services to its customers and the stiff competition seen in the payment arena.听

Interestingly, Stripe has become the most active private company investor since its investment in in 2017. It is now an investor in at least , per SA国际传媒, and has led 15 of those funding rounds.听

It has invested in nine companies this year alone, contrasting with eight investments for the whole of 2020.听听

The payments ecosystem is complex with legacy systems and new platforms in different regions needing to transact. It is no surprise that Stripe is investing in fintech even in some cases in an arena where it competes and partners. It has invested most heavily in the payments sector in (UK), (Philippines), Paystack (Nigeria, which it acquired), (Israel) and (Pakistan).听

Stripe has also invested in neobanks (UK), (U.S.) and (Mexico), as well as services focused on tax like , payroll such as and cap table management like . Platforms focused on customer engagement that it invested in are , and .听

The largest rounds Stripe participated in include two UK-based companies鈥攑ayments platform Rapyd and Monzo鈥攁nd the rounds it co-led in San Francisco-based checkout company and New York-based corporate credit card issuer .听

Leading payment companies

Stripe competes in the payments space with other companies that have seen their valuations and revenue climb during the COVID-19 pandemic.听

Two Bay Area-based companies鈥� at $320 billion and , built for merchants, at $120 billion鈥攍ead in market capitalization among public companies in the payments space.听

Amsterdam-based payment processor is currently valued around $73 billion. All three of the public companies have seen their stock price and revenue climb significantly in 2020.听

Of these competitors, Square is focused on in-store merchant payments and PayPal, an online payment solution, allows individuals and businesses to set up accounts and transfer funds electronically. Adyen is a payment processor that sets up a merchant account, unlike Stripe which processes transactions on behalf of a business.听

Stripe鈥檚 focus, from its beginning, was focused on building developer-friendly code to add to a website to process payments.听

Unicorns

Another notable private company payments provider is Sweden-based buy-now-pay-later platform . The company was last valued this March 2021 at $31 billion, with a $1 billion funding raise. Klarna has raised $3.1 billion over time and thought to be as reported by Reuters earlier this year.听

In North America and Europe, fintech decacorns also include commission-free trading app , checkout experience platform and neobank of the .听

Financial service companies comprise a total of , 18 percent of the 791 current private unicorns.听

European fintech companies that include mobile banking , and . U.S. fintechs that include digital lending platform , pocketmoney app and corporate travel management company .听

Market opportunity

Stripe has not indicated that it plans to go public anytime soon. Still, we know from speaking with Roelof Botha, the lead for Sequoia Capital鈥檚 U.S. business, who has been involved in quite a few portfolio company public offerings, that the investment firm鈥檚 companies tend to prepare at least a year in advance of going public.听

Stripe鈥檚 hiring in October 2020 of CFO , previously the CFO at GM, is another indicator that the company could be getting ready for a public-market debut. Since the third quarter of 2020 Stripe has also beefed up its management team and hired Chief Revenue Officer , Chief People Officer , and Chief Risk Officer .听

Stripe has also appointed two new in 2021: , the previous governor of the Bank of England, and of Aon plc. They joined existing board members , and as well as the Collison brothers on Stripe鈥檚 board.

Suryadevara summed up how Stripe sees the opportunity ahead in the company鈥檚 most recent funding announcement, noting that today is conducted online: 鈥淲hile Stripe already processes hundreds of billions of dollars per year for millions of businesses worldwide, the opportunity ahead is much larger for Stripe than it was when the company was started 10 years ago.鈥澨�

We tend to agree.听

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Stripe funding, investors and board

Stripe investments and acquisitions

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Unicorns

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