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Future Startup Dossier: Stripe

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May 6, 2021

The Journey of Stripe. Founded in 2010 by John and Patrick Collison, Stripe is one of the fastest-growing fintech companies in the world. The company provides APIs which web developers can use to integrate online payment processing in their websites.

The Collison brothers are prolific entrepreneurs. Before Stripe, they founded and sold Auctomatic, a company that used to make software for eBay sellers. A Y Combinator portfolio, Live Current Media acquired Auctomatic for $5M in 2008 in just ten months of founding. 

Stripe was founded in 2010. The same year, the company got into Y Combinator. In 2011, Stripe launched a beta version and received a $2 million investment from Elon Musk, Peter Theil, and Andreessen Horowitz. Stripe was officially launched in September 2011. The following year, Sequoia Capital and American Express Ventures invested in the company at a $100 million valuation. 

In 2013, Stripe acquired ‘Kickoff”, a chat and task management application.

In 2014, Stripe raised several rounds of investments and by the end of 2014 the company was valued at $3.5bn. 

In February 2016, the company launched Atlas, with an ambition to make launching companies easier. Today, anyone can register a US company from anywhere in the world using Atlas. 

In April 2018, Stripe launched Radar, a machine learning fraud detection system that could reduce credit card fraud by as much as 25%. The same year, Stripe introduced their new platform Issuing for companies to issue MasterCard and Visa Credit Cards. 

In 2018, Stripe introduced a billing product for online businesses, allowing businesses to manage subscriptions, recurring revenue, and invoicing. Stripe Press was launched the same year to promote innovative ideas in business and tech.

In 2019, Stripe started offering loans and credit cards to US companies. In October 2020, Stripe launched ‘Stripe Climate’, a service aimed at businesses that are working for atmospheric Carbon Capture and Sequestration (CCS).

In October 2020, Stripe acquired Paystack, Africa’s one of the biggest payment processors. In 2020, the company rolled out its service in five new European countries: Czech Republic, Romania, Bulgaria, Cyprus, and Malta. As of writing this article, Stripe payment service is available in 42 countries, the majority of which are in Europe.

In 2019, Stripe raised $250 million in funding. In 2021, Stripe’s valuation reached $95 billion following a $600 million Series G funding round. 

Stripe’s Growth. When Stripe launched, there were already dominant payment players like PayPal in the market. But overall online payment experience was cumbersome, costly, and complex. Stripe came up with a payment solution that was designed for the developers and programmers. The product was simple and easy to use and developed loved it, which helped them grow quite fast in the early days. From there, it took Stripe just 10 years to become one of the dominant players in the fintech market. 

Stripe started as a developer-first product. Going after the main group of people involved in integrating the payment system worked as an excellent growth lever for Stripe. From the beginning, the Collison brothers identified two strategies that helped the company quickly grow to prominence: targeting a hard-to-reach group of customers — the developers who were looking for a simpler online payment solution and providing a simple and transparent payment solution.

Stripe continues to be one of the most fascinating companies across verticals, this dossier aims to offer a peek inside Stripe.


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The untold story of Stripe, the secretive $20bn startup driving Apple, Amazon and Facebook: In 2007, when the Collison brothers were coding their APIs, online payments were supposed to have been solved. Elon Musk, Peter Thiel and Max Levchin founded PayPal in 1998, which was bought by eBay in 2002 for $1.5 billion. The fintech ‘revolution’ that followed, however, wasn’t much of an uprising but more of a spot of portfolio diversification by some banks that laid down the payment rails any eager startup had to ride on. The banks still verified identity and owned the account for cards and payments drawn from.In 2010, the brothers dropped out of college and launched Stripe in San Francisco with seed funding from accelerator Y Combinator. The company offered seven lines of code and a promise that no other changes were needed. Developers who integrated the Stripe API wouldn’t have to touch it for years.

From Tipperary to Silicon Valley: how Stripe became vital cog in digital economy: In little more than a decade the Collison brothers have developed Stripe, which has headquarters in Dublin and San Francisco from a tech startup into a vital cog in the global digital economy, providing customer payment and other e-commerce services to brands ranging from Google, Amazon and Uber to Deliveroo, Spotify and Peloton.

Startup Lessons: How Stripe Created A $35 Billion Giant: Back in 2010, two twenty-something Irish entrepreneurs, John and Patrick Collison (they are brothers), launched Stripe. The main reason was the frustrations they experienced with online payment systems.

"Stripe originally built an incredibly simple and innovative approach to online payments,” said Eytan Bensoussan, who is the co-founder and CEO of NorthOne, “ Stripe built exponential enterprise value from that point forward by not only protecting its core offering but also by methodically expanding into new areas with the same level of simplicity. The key, however, was that each new area, be it subscription management, invoicing or lending, has been adjacent to its flagship product. This has created more points of entry for new customers and more cross-sell opportunities for existing ones.”

Growth Stories: Why Is Stripe So Popular?: When Stripe was launched in 2010, dealing with payments online wasn’t a straightforward matter. It required significant development work, working with banks and other financial institutions, passing multiple verification and compliance hurdles, and so on. Fast forward 10 years and setting up shop and accepting payments has become a lot easier, thanks to a large extent to Stripe. The company has managed to capture a significant market share thanks to all the innovation they have pioneered in the last decade.

Stripe’s Value Jumps to $95 Billion, Becomes Top U.S. Startup: The valuation figure is at the top of the range Bloomberg News reported in November, when Stripe was in talks with investors that would boost its value to more than $70 billion, with the possibility of pushing it to as high as $100 billion. The valuation also overtook billionaire Elon Musk’s SpaceX and Instacart Inc., according to CBInsights data.

How Stripe Became Silicon Valley's Hottest Startup: Stripe's revenue last year rose nearly 70%, to about $7.4 billion, according to people with knowledge of the company's finances.Other startups might have flashier apps or more recognized brands, but Stripe showed that it is better to be a workhorse than a show pony.

Now sitting atop a $95 billion valuation -- the highest for a private Silicon Valley company, according to data firm PitchBook -- Stripe is bulking up overseas, preparing to go public and working to build a one-stop financial supermarket for the internet economy.

Multi-billionaires by 30 — the rise and rise of the Collison Brothers: Flash forward a decade Stripe’s most recent round of funding saw the company raise $600 million after an incredible $95 billion valuation – an increase of almost 300 percent in less than a year. Amazingly, this makes Stripe the world’s second most valuable venture-backed company behind ByteDance, the $180 billion company behind TikTok.Stripe itself estimates that 75% of UK adults have made a payment via Stripe over the last year via platforms including Deliveroo, Zoom and Instagram.

An interview with Patrick Collison: Founded in 2010, Stripe was an immediate hit among developers for its straightforward, API-based approach to getting an online business up and running. Co Founders John and Patrick Collison had seen that the internet’s online payment infrastructure was broken, so they fixed it. Eight years later, they’ve parlayed their early cult status into a $9 billon valuation and an impressive roster of clients big and small.

Perhaps unsurprisingly, Patrick, Stripe’s CEO, has a clear-minded approach to his company’s human infrastructure, which now includes over 1,000 people, and offices around the world. I sat down with him to talk about culture building, the importance of explicit communication, and the lessons he’s learned from Stripe’s seven years of rapid growth.”

Stripe: Platform of Platforms: Ben Thompson writes: “Stripe is ten years old now, but the ambition implied by these announcements explain why the founders claim they are just getting started. John Collison noted:

"We are still very early in developing the set of Stripe products beyond the core payments engine, things like Treasury. We’re building a global payments and treasury network, and we are in November of 2020 launching the Treasury part of it, and so we are just now filling out all the acronyms in our product suite, and that’s the version one of the product. And from a growth point of view, our business is growing really rapidly in APAC and EMEA, and so we’re just early in the business trajectory with all the helter-skelter-ness that comes from that.”


Watch.

How Stripe Became A Multibillion-Dollar Company With a New Approach to Payments | John Collison | Inc.

Stripe Sessions 2019 | The future of payments | John Collison | Stripe

Founders Build Roads, Not Cars | Patrick Collison + Derek Andersen

The Stripe Approach to Building a Better Business | 92nd Street Y

Blitzscaling 11: Patrick Collison on Hiring at Stripe and the Role of a Product-Focused CEO | Stanford University | Grey Lock

Stanford Seminar - Entrepreneurial Thought Leaders: John Collison of Stripe | Stanford Online

Ruhul Kader contributed to this article.

Cover photo courtesy: Stipe logo

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Tithi Chowdhury is an undergraduate student majoring in Botany at the University of Dhaka. She is a Trainee Analyst at Future Startup and looks after our Collective Knowledge initiative where she prepares interviews and writes articles on interesting topics. She is a voracious reader and loves listening to podcasts in her spare time.

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