NEW YORK (BLOOMBERG) – Stripe’s valuation almost tripled in less than a year to US$95 billion (S$127.7 billion) with its latest funding round where it raised US$600 million, according to statement by the online payments processing company.
The valuation figure is at the top of the range Bloomberg News reported in November, when the company was in talks for another round of funding that would boost its value to more than US$70 billion with this latest fundraising, with the possibility of pushing it to as high as US$100 billion.
Stripe’s software, which competes with Square and Paypal Holdings, is used by businesses to accept payments. Customers include Amazon.com, Salesforce.com, Lyft and Instacart. The company was valued at US$36 billion as recently as April.
The capital raised will be used to invest in its European operations, in particular its headquarters in Dublin, Ireland, to support surging demand and expand its global payments and treasury network. The company, run by billionaire brothers John and Patrick Collison, didn’t really need the money in spite of the fundraising, chief financial officer Dhivya Suryadevara said.
“I view this as a bit more opportunistic,” she said in an interview on Sunday. Stripe “is highly capital efficient.”
Primary investors in Stripe include the digital investment unit of Allianz Group, Axa, Baillie Gifford, Fidelity Management & Research Co, Sequoia Capital, and Ireland’s National Treasury Management Agency.
“It will just sit on the balance sheet,” Mike Moritz, partner at Sequoia Capital and a Stripe board member, said in an interview, emphasizing that the money will just be “a rainy day fund.” “It pays to have a little more insurance,” he said.
Stripe’s growth also came as some of its customers such as Instacart, which started out small, have become significant companies. For Stripe, “the growth has been rapid and perhaps more rapid than anticipated,” Mr Moritz said.
Both Mr Moritz and Ms Suryadevara said Stripe will continue to seek out acquisitions. The company isn’t focusing on an initial public offering right now, the CFO said, and picked investors who shared its long-term view. “The next 10 years and beyond are even more exciting,” she added.
Stripe was founded by the two Irish brothers in 2010. Ahead of the latest fundraising, Stripe said last month it appointed former governor of the Bank of England and Bank of Canada Mark Carney to its board to help guide the company in its efforts to enable more businesses to bring funding to emerging carbon removal technologies.
Stripe, which sells software allowing businesses to accept online payments, has been a beneficiary of the e-commerce boom accelerated by the coronavirus pandemic. The company has recently branched out to offer checking accounts to businesses through e-commerce providers, working with banks including Citigroup, Goldman Sachs Group and Barclays.
In April 2020, the San Francisco-based company raised US$600 million from investors including Andreessen Horowitz and Sequoia Capital.