Words: Tom Ward
Online sales is big business; in 2020 alone, US e-commerce grew by 44 percent, accounting for 21.3 percent of total American retail sales for the period.
In other words, there’s a lot of money in money.
It’s something Patrick and John Collison (32 and 30) know well. The Irish entrepreneurs founded Stripe in 2010 after receiving $2 million worth of investment from some of the biggest names in tech.
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.
A financial services and software as a service company, Stripe has found fortune by revolutionising and updating how online transactions are carried out.
Prior to services like Stripe, the technology underlying e-commerce was dated, with companies required to go through a rigorous and timely process before they could start trading.
Stripe simplified this by allowing merchants to accept credit card payments directly to their apps or websites.
Stripe’s San Francisco HQ
Stripe itself estimates that 75 percent of UK adults have made a payment via Stripe over the last year via platforms including Deliveroo, Zoom and Instagram. And for each payment, Stripe takes a small percentage of the profit.
Early investors induced Lyft, Facebook and Elon Musk and Peter Thiel. Today, it is believed Stripe handles a large amount of Amazon’s transactions – which may account for its incredible valuation this year.
It’s a valuation made all the more impressive considering the company was valued at $9.2 billion in 2016, at the time making the brothers the world’s youngest self-made billionaires with an estimated worth of $1.1 billion each.
As of 2021, Stripe’s customer base counts over 50 companies that each process over $1 billion annually, with its enterprise revenue doubling year on year.
The pandemic has played a part in Stripe’s recent growth, with over 200,000 new companies signing up to the platform since the beginning of the Covid pandemic. According to co-foudner John Collison, Stripe handled over 5,000 payment, refunds and customer data requests per second in 2020.
“Stripe itself is now bigger [by payment volumes] than the entire e-commerce market was when we started working on Stripe,” he added.
"Stripe itself is now bigger than the entire e-commerce market was when we started..."
“Most people under-appreciate Stripe’s global scale and leading ability to serve the most complex enterprise customers,” Timothy Chiodo head of payments and fintech research at Crédit Suisse told finextra.com. ”Stripe’s global scale and market reach continues to expand and they are a now a leader and gaining meaningful share in the enterprise segment.”
Following the most recent round of funding, Dhivya Suryadevara, Stripe’s chief financial officer, announced that the company plans to expand to millions of businesses in Brazil, the UAE and Asian markets including India, Indonesia and Thailand.
“We’re investing in the infrastructure that will power internet commerce in 2030 and beyond. The pandemic taught us many things about society, including how much can be achieved, and paid for, online, but the internet still isn’t the engine for global economic progress that it could be,” Suryadevara said.
She added that “while Stripe already processes hundreds of billions of dollars per year for millions of businesses worldwide, the opportunity ahead is much larger for Stripe than it was when the company was started 10 years ago.”
The story of Stripe begins with the prodigy-like ascensions of both Patrick and John Collison. Born in Tipperary, Ireland in 1988 and 1990 respectively, the brothers have always had a knack for innovation.
Patrick in particular showed early promise, taking his first computer course at the age of eight at the University of Limerick before winning the 41st Young Scientist and Technology Exhibition in 2005 with a project on a LISP-type programming language at the age of sixteen.
Then, like a true child genius, he then went on to attend MIT based on a SAT score he achieved at the age of 13.
John, meanwhile, achieved the highest-ever score received by a student for the Irish Leaving Certificate (the final examination in the Irish secondary school) prior to leaving for Harvard.
In between exams the brothers at worked together developing iPhone apps, including an $8 version of Wikipedia that allowed people to search for information offline.
Then, in 2007 the brothers set up a software company Shuppa that built tools for eBay. The company quickly merged with Auctomatic, and was sold in 2008 for $5 million, making the Collisons instant millionaires.
"Patrick attended MIT based on a SAT score he achieved at the age of 13..."
Not that wealth changed the brothers. When asked about becoming billionaires at the ages of 29 and 27, John told the BBC: “People now ask this a lot and I feel like they always want some really interesting answer – and I have nothing for them.”
With money in their pockets the brothers dropped out of their respective universities and relocated to Palo Alto, California to begin work on what would become Stripe.
As The Gentleman’s Journal previously reported, the brothers would micromanage every detail of Stripe’s early development, often spending up to 15 hours per week on job interviews. Eventually, however, they decided to step back in order to focus on making big-picture decisions, delighting the day-to-day to other staffers.
The hard work has certainly paid off. Today the company employs 3,000 people (including former Bank of England governor Mark Carney) and is currently active in 42 countries, including 31 in Europe.
According to Bloomberg, this year’s valuation has made Stripe (which is now headquartered in San Francisco) the US’s top start-up, comfortably eclipsing early investor Elon Musk’s own SpaceX which was valued at $74 billion in February 2021.
In other words, the sky is the limit for the Collisons.
So, where next?
The plan is to invest Stripe’s latest round of capital in expanding its European operations, with a key focus on its Dublin headquarters.
The company already has 300 staff in Dublin, but aims to add to this, boosting the economy of the country that nurtured the brothers’ early ambitions.
“We’re investing a ton more in Europe this year, particularly in Ireland,” says John Collison. “Whether in fintech, mobility, retail or SaaS, the growth opportunity for the European digital economy is immense.“
After their meteoric rise, the Collisons’ commitment to investing in Irish jobs is surely a sign that despite billions of dollars and offices across the world, home remains important to them – an ethos that has helped the business remain grounded despite its success.
“The pandemic taught us many things about society, including how much can be achieved – and paid for – online,” Stripe chief financial officer, Dhivya Suryadevara, said in a statement. “Over 1,000 new jobs will be created over the next five years. These are really good, well-paid, professional jobs and will be a real boost to the economy. I wish Stripe the very best with its plans”.
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