Stripe earns its… erm… big payday

Stripe becomes the 3rd highest valued startup behind WeWork and Juul.

Stripe, an online payment processing company, is raising $250m in new funding — bringing its valuation to $35B and making it the 3rd highest-valued US startup.

Stripe earns its… erm… big payday

Are payment processors the new internet royalty?

Apparently so. As commerce has moved away from physical storefronts to digital spaces like in-app purchasing, payment processors are increasingly important — and Stripe has been a big player in making it happen. 

Although consumers don’t see Stripe’s branding when they look at their shopping carts, more than 80% of American online shoppers have made a Stripe-powered transaction in the past year.

The transaction titans are major moneymakers. Overhead is low, and because they charge 2% to 3% on each purchase, they bring in steady revenue. 

Naturally, investors want in

In 2018, more than $22B in VC went toward payment startups globally — more than 4x more than in the previous year. Stripe’s co-founders have been committed to staying private. But increasing competition might change their minds.

Though Stripe surpassed its biggest rival, Square — valued at about $25B — there’s more competition outside the ropes. Checkout, a London-based payments processor, sold a $230m stake earlier this year, bringing its valuation up to $2B. It’s ready to bring its game to the US.

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