After a week of launching new services to bring payments giant Stripe into the areas of lending and credit, the company is announcing another big step forward to fuel its growth: it’s raising another $250 million in funding at a pre-money valuation of $35 billion, money to fuel more international expansion, launching more products and targeting larger enterprise-sized businesses.
This is a huge jump in valuation for the company: Stripe was valued at $22.5 billion earlier this year when it raised $100 million.
The startup said that General Catalyst, Andreessen Horowitz and Sequoia are all in the round already. We’ve also heard that SoftBank had been considering an investment. “It was a big miss when SoftBank didn’t invest two years ago,” one source close to the VC said to TechCrunch. But we’ve confirmed also with John Collison — the president of Stripe who co-founded the company with his brother Patrick (who is the CEO) — that SoftBank is not in this round.
Nor will there be any corporate strategics involved in this round. Of note, Collison today confirmed that the bank providing the financial backing for its new cash advance and corporate card services is Celtic Bank, based in Salt Lake City. But the bank is not taking a strategic investment in the company as part of that deal.
Although the round is not yet closed, Collison said the $250 million size is unlikely to change. The round should close in the next several weeks, he added.
Stripe has long been reluctant to talk about when it might consider going public, and this round will put that prospect off even further. “We are still very happy as a private company,” Collison said today. “Our emphasis remans on the long-term opportunities.”
Stripe spent the first several years of its life slowly building up its payments business — which primarily consisted of providing an API to e-commerce businesses so that they could easily integrate a payments option in their apps or websites.
But in more recent years, it’s started to accelerate its growth with a significantly larger range of financial services — notably, now it describes its business as a “Global Payments and Treasury Network.” The latest products — cash advances and credit cards — are coming on the heels of other services that include incorporation services, fraud protection and and more.
All this means not only that the company can diversify its own revenues, but it can differentiate itself from (or, in some cases, offer the same services as) its competitors. Others offering similar services to Stripe’s include PayPal and Adyen on the payments front, but as it adds more services, it’s also opening new competitive fronts with other rivals, now including Square, Brex and Clearbanc.
While the U.S. remains Stripe’s main market, especially for new launches, it’s getting increasingly global. The company last week expanded its payments out to eight more countries and that is set to expand again to total 40 in the coming months.
The company says it processes “hundreds of billions of dollars a year for millions of businesses worldwide,” although it declines to give specific numbers. Wayfair, Airbnb, Twilio, GitHub and The RealReal are among the kind of “enterprise” customers that it hopes to target more. Indeed, as startups in e-commerce grow into huge businesses, they are turning from being the kinds of small companies that Stripe used to target into the big companies that it now wants to target.
“This comes in the context of the fact that we feel strongly about Stripe’s role in the growing internet economy,” Collison said.
As we have pointed out before, the internet economy, for all its seeming ubiquity, is still a small part of all commerce, which is one reason brick and mortar is likely to be another target for Stripe in the long run, building on the point-of-sale services it already provides — even as the company continues to reap the rewards of its traction in the digital universe.
“Even now, in 2019, less than eight percent of commerce happens online,” said John Collison, president and co-founder of Stripe, in a statement announcing the round. “We’re investing now to build the infrastructure that’ll power internet commerce in 2030 and beyond. If we get it right, we can help the internet fulfill its potential as an engine for global economic progress.”
Updated with comments from John Collison, the co-founder of Stripe