Today's publication will be dedicated to the high-profile IPO in the field of fintech, which was made by Stripe.
She specializes in online payments and is working on services for paying salaries to employees. The issuer also tries to fight fraud.
Stripe is known as a payment platform or API for some corporations. It was also noted in startups and various public companies. The management of the corporation focuses on the cloud architecture so that the company is more reliable and secure.
Thanks to the cooperation with Stripe, companies have the opportunity to control their expenses, prevent any fraudulent manifestations and develop in an international direction using corporate credit cards or loans for small businesses. Such giants as Amazon, Google, Spotify and Microsoft cooperate with the issuer. Every year, Stripe spends tens of billions of US dollars through its payments.
Today it is the most expensive private company in the financial and technological sphere. It was founded by John and Patrick – the Collinson brothers. Their goal was to create a service that would make it easier for small and medium-sized businesses to process payments. They wanted to turn the idea of outdated banking systems around, taking into account the prevention of PayPal errors. Elon Musk, the founder of the latter, was the first to invest in Stripe.
In 2010, the world first heard about the company, but the impetus for this was the sale of the Shuppa company by the Collinson brothers in 2008. The latter produced software. The initial capital of $5 million was enough to start and attract the attention of Silicon Valley investor Peter Thiel and Elon Musk himself, who added another $2 million. The official exit from the beta format and the launch of Stripe took place in 2011.
In 2012, representatives of Sequoia Capital invested $18 million in the company, which allowed it to enter the international market. A couple of years later, the brothers got $80 million, which gave them the opportunity to consolidate Stripe in 12 different countries around the world.
The payment service developed quite quickly and already in 2015 the company had $100 million on its account, and a year later $150 million. By 2017, when Stripe had $245 million in its account, almost all representatives of the financial sector knew it. After the company bought Paystack last year and TaxJar this year, it became more well-known.
Today, Stripe is valued at $80 billion, which is more than Facebook, Uber or even SpaceX before the IPO.
Not so long ago, the Stripe team completed a round of attracting investments, as a result of which it was possible to raise $600 million. For this money, the company will develop in the EU, India, as well as Brazil and Indonesia.
The listing is planned for the end of this year or the beginning of next year.
Read more: Listing of securities on the stock exchange
Sources of the company's income
To a large extent, Stripe generates commission income from the transaction. It is worth noting that the company processes about $100 billion annually. These commissions are distributed between online payments, personal payment terminals, accounts, subscriptions and connections for those customers who need to pay funds to third-party people. The company's money is also brought by Stripe Capital's business loans, as well as the Radar program for identifying fraudulent schemes.
PayPal and Square are the most important competitors of the company. Recall that the PayPal IPO, which took place in 2002, was estimated at $1.5 billion and until today this figure has grown to $360 billion. Since PayPal is considered a classic payment system, Stripe wins, because the company offers a more innovative set of services.
Square started its mobile payment processing business around the same time as Stripe. However, the latter is heading for online payments. Recall that Square's IPO was implemented in 2015, when the company managed to raise $243 million. Then it was estimated at $2.9 billion. By the end of 2021, the issuer's value should reach $120 billion, according to experts.
Let's see why it's worth investing in Stripe after the IPO.
Read more: IPO of a company - mechanism, examples & strategies
Stripe makes life easier
Before Stripe offered its services to the world, online payments from bank cards created a lot of problems for people. Back then, payment system providers had too complex integrations. The Collisons analyzed this and decided to change the situation.
Now just a few lines of code on the page of your website are enough to start working with online payments. Thus, Stripe managed to simplify the integration process as well as payment processing.
The company provides the possibility of integration into any online platform, which opens up many new opportunities for users. Stripe is friends with Squarespace, BigCommerce, as well as Memberful and Shopify. A person who does not understand anything about programming will be able to start cooperation with Stripe.
The pleasure and effectiveness of cooperation
It is important for any international company to maintain the level of quality of communication with customers, and the payment service provides customer support. Taking into account the fact that most people hardly understand the process of website development, and even more so payment processing, Stripe supports and thus retains its customers.
It is worth noting that Stripe works in such a way that users of any site do not notice it, while PayPal is visible during any payment process. If the seller cooperates with the latter, then you will be redirected to the PayPal page for payment and only after the successful implementation of the process will you be returned to the store page.
In the case of Stripe, payments are processed as transparently as possible.
Read more: How to participate in an IPO
Stripe managers managed to create a self-regulating recruitment system. We are talking about Sunday tests for people who want to work in the company. In the process of passing this test, you need to answer questions about whether an existing team member is ready to work with the candidate on the weekend. If not, the search continues.
This allows the team to be more cohesive and work more efficiently.
Experts say that after the IPO, Stripe will be able to take a serious place in the fintech sector and delight shareholders with success.