Collison brothers’ San Francisco start-up has tapped into the globalisation of online commerce.
Limerick brothers Patrick and John Collison’s Stripe has been valued at $20bn after the company raised $245m in investment from Tiger Global Management, Sequoia and DST Global.
The investment will enable Stripe to expand its engineering teams to grow its international reach, especially in India and south-east Asia, where more than 500m people are expected to move online in the next three years.
‘Better global payments infrastructure will increase economic output, encourage entrepreneurship and help up-starts compete with incumbents’
– PATRICK COLLISON
Stripe plans to deploy a new engineering hub in Singapore to join its existing network of hubs, which includes Dublin, Seattle and San Francisco.
How the web will be won
Crucially, the company is banking on the vast amount of territory yet to be won in the e-commerce space, where currently only 3pc of online commerce is online today but that number is tipped to grow to $4trn by 2020.
Stripe is currently live in 25 countries but it is clear that its expansion plan pivots upon enabling native buying experience in markets that are opening up, hence the need for local talent.
“We believe in the contingency of progress,” said Stripe CEO and co-founder Patrick Collison.
“Better global payments infrastructure will increase economic output, encourage entrepreneurship and help up-starts compete with incumbents. By bringing Stripe into more markets and building out our capabilities for companies of all sizes, we hope to accelerate innovation around the world.”
Stripe’s technology is pivotal because it helps remove the sea of gateway providers, credit card processors, merchant acquirers, and specialised payments methods and wallets that vary in different markets around the world.
Instead, Stripe has created an integrated technology stack for the programmatic movement of money that includes APIs to enable developers to seamlessly add payment capabilities to websites, apps and other digital platforms.
The toolkits devised by Stripe tackle everything from languages to regulations, foreign exchange, virtual cards, subscription-based billing and more. More than 3,200 versions of its core API have been rolled out over the past year.
Its technology powers the global payments operations of customers that include Google, Mindbody, Spotify and Uber, to name a few.
How two Limerick brothers conquered e-commerce
The growth story that is Stripe is all the more compelling when you consider that in the last year alone, more than 80pc of Americans made a purchase using Stripe in some way. That’s not a bad achievement for the two brothers, who grew up in Tipperary and went to school in Limerick.
When they were teenagers living in Limerick, the Collison brothers began a start-up called Shuppa in 2007 and it later became known as Auctomatic. The company attracted funding from Silicon Valley venture capital firm Y Combinator, and was acquired just a year later by Canadian firm Live Current Media for $5m (€3.2m), when the brothers were just 17 and 19, respectively.
Stripe was founded eight years ago when Patrick was 22 and John was 19.
The brothers’ San Francisco-headquartered company raised its first round of funding of $2m in March 2011 from investment veterans Peter Thiel, Elon Musk, Sequoia Capital and Andreessen Horowitz. This was followed by a further funding round of $18m in February 2012 by Sequoia Capital, which at the time valued the company at $100m.
A report that year by SecondMarket listed Stripe as one of Silicon Valley’s rising stars and tipped it for a $1bn valuation. Further investments from players including Visa and Thrive Capital in the following years saw the valuation grow to $5bn.
In 2016, a $150m investment round led by CapitalG and General Catalyst valued Stripe at $9.2bn, and the company established its European headquarters at the 45,000 sq ft The One Building near Silicon Docks in Dublin.
Earlier this year, Siliconrepublic.com reported that the company was to locate its first engineering office outside of San Francisco at The One Building to spearhead international development of its technology.
If you thought the last eight years were interesting for a company started by two Irish lads in San Francisco, hold on to your hats because the next two or three years alone could be breathtaking as the online commerce revolution goes from west to east.