Stripe's new $95B valuation makes it the most valuable Silicon Valley startup

Dive Brief:

Stripe raised $600 million in its latest round of fundraising, giving the payments processing software company a $95 billion valuation, it said in a press release yesterday. That makes Stripe, with dual headquarters in San Francisco and Dublin, Ireland, the most valuable company ever to emerge from Silicon Valley, the Financial Times reported.
The company, which has not publicly discussed when it might file for an IPO, said it will use the latest capital injection to expand its already significant European operations, particularly its Dublin headquarters. Stripe hasn't disclosed financial statements, but said in the release it now has 50 corporate clients that each process more than $1 billion annually.
Stripe took in the latest investments from European insurers Allianz Group and Axa, as well as investment management company Fidelity and venture capital firm Sequoia Capital, among others. Participation by the big insurance companies could indicate a move into services for that industry as it builds out its suite of online e-commerce services for customers, according to a report from TechCrunch.

Dive Insight:

The 10-year-old Stripe, with about 2,500 employees at 14 offices worldwide, rapidly built out an array of services for businesses seeking to facilitate commerce via the internet, from processing payments and invoices to managing subscriptions to issuing credit cards. While it gained traction from attracting business from startups like itself, including Shopify, Grab and Spotify, it has also landed work from more established companies such as Amazon and Google.

Billionaire brothers Patrick and John Collison co-founded Stripe and they've set their sights on continuing to expand the company's e-commerce services. "Whether in fintech, mobility, retail or SaaS, the growth opportunity for the European digital economy is immense," President John Collison said in the release. (Patrick Collison is the company's CEO.) European clients already include payments peers Klarna, neobank N26, auto-maker Jaguar Land Rover and shipping giant Maersk.

The pandemic, with its surge in contactless online purchasing, accelerated the company's growth. Nonetheless, it remains to be seen whether those changes in consumer buying habits will persist. Another challenge for Stripe will be in combating the pack of competition that has sprung up, thanks to the same COVID-19 impacts that powered its own growth. Among its rivals are Silicon Valley pioneer Square, now valued at about $112 billion, Dutch competitor Adyen and London startup Checkout.com.

"The pandemic taught us many things about society, including how much can be achieved — and paid for — online, but the internet still isn't the engine for global economic progress that it could be," Stripe CFO Dhivya Suryadevara said in the release. Suryadevara joined the company last summer after leaving GM. Beyond Europe, Stripe is also aiming to reach new businesses soon in Brazil, India, Indonesia, Thailand and the United Arab Emirates for expansion. The company tabulates that only 14% of the world's commerce takes place online today.

Stripe's new valuation easily outranks other Silicon Valley fintech darlings such as trading app company Robinhood, which could be valued as high as $40 billion, and challenger bank Chime, which was valued at $14.5 billion in September, based on recent secondary share trading, according to Quartz.

It even outstrips the $74 billion market valuation put on Elon Musk's SpaceX in February following that company's latest $850 million in fundraising. Nonetheless, Musk, who founded SpaceX and Tesla, has gotten a piece of the Stripe action as one of its earlier investors, which also include venture capitalists Peter Thiel and Andreesen Horowitz. Doubtless, some of Stripe's many investors will be eager for an IPO that would allow them to cash out.

Internationally, Stripe's valuation still lags that of private Chinese companies angling to go public, including TikTok parent ByteDance and Ant Group, each of which has reportedly reached a valuation of more than $100 billion.