categories

HOT TOPICS

Subscribe to our Feed

2016 IPO Prospects: Is Stripe Lining up Next?

Posted on Friday, Apr 15th 2016

According to a recent Accenture survey report, 18% of North Americans use mobile payments technology on a regular basis. It is a much higher percentage for millennials and higher-income households, of which 23% and 38%, respectively, use contactless payments at least once a week. But the market is a fast growing one. eMarketer forecasts the total value of mobile payment transactions to increase 210% this year to $27.05 billion.

Stripe’s Financials

San Francisco-based Stripe is already riding on the growth of the market. Stripe began life in 2009 when brothers John and Patrick Collison wanted to set up an online platform to simplify the process of accepting payments for websites and apps. Its application enables companies to set up credit card processing capabilities on their digital pages by embedding a simple code.

Like other mobile payment services providers, Stripe earns revenues by levying a transaction fee. The fee is charged at 2.9% of the transaction value plus a commission of $0.30 per transaction. It does not disclose its financials, but analysts estimate that the company processes about $20 billion in transactions a year. At that rate, it’s revenues would be close to $450 million as of 2015. In 2013, revenues would have been closer to $43.5 billion given its transaction levels. It is able to support transactions in more than 100 currencies globally.

Stripe is venture funded so far with $280 million raised from investors including Visa, Thrive Capital, Khosla Ventures, Founders Fund, General Catalyst Partners, Sequoia Capital, Allen & Company, Y Combinator, SV Angel, Aaron Levie, Chris Dixon, Elad Gil, Peter Thiel, Elon Musk, and Andreessen Horowitz. Its last round of funding was held in July 2015 when it raised $90 million in a round led by Visa at a valuation of $5 billion. In December 2014, the company had raised $70 million at a valuation of $3.5 billion, having grown from a $1.75 billion valuation round held in January 2014.

Stripe’s Competition

According to a report by Finro, Stripe is the second biggest digital payment solutions provider after PayPal and PayPal-owned Braintree. Based on information the researcher collated from top 1,000 websites, PayPal and Braintree together were used by 41.6% websites followed by Stripe’s 14.3%.

Stripe has managed to create a big market for itself by building a list of impressive partners. Besides tying up with social media giants Facebook and Twitter, it has also tied up with Apple for Apple Pay and Alibaba for AliPay to support their in-app and e-commerce purchases.

Last year, Stripe released a new product Relay to its merchants. Relay simplifies the process of adding a ‘buy’ button directly to the apps for developers. The product was aimed at making it easier for consumers to purchase products from mobile devices considering that browsing for products is now happening more on these devices.

But the competition in the industry is unrelenting. The PayPal–Braintree duo was expected to process nearly $50 billion in transactions in 2015. They also have an impressive customer list with names like Uber and Airbnb. Since its last financing round, valuations across the industry have gone down. Another mobile payment service provider Square went public early this year at a valuation of $3.9 billion compared with the $6 billion valuation it was trending at prior to listing. For comparison, Square reported net revenues of $1.27 billion for 2015 with a net loss of $1.24 per share. But Square’s performance has improved in the recent months as it is currently trading at a market capitalization of $4.9 billion. Stripe hasn’t filed yet for an IPO, but it must surely be watching Square’s IPO performance from the sidelines to figure out its next move.

This segment is a part in the series : 2016 IPO Prospects


. Airbnb Sees Skyrocketing Valuations
. Actifio Looks Ready
. AppDynamics May Sustain Unicorn Valuation
. Automattic Needs to Justify Valuation
. Avant Will Have to Wait and Watch
. BuzzFeed Feeds on Native Advertising
. Coupa Manages Expenses Expertly
. Datto Bootstrapped First, Raised Money Later
. Is Uber Ready to Ride the Stock Market?
. Overfunded Domo Looks Promising
. Houzz May Unveil The Curtains
. DocuSign Looks Ready to Sign Up
. Illumio Rides On Security Trend
. InsideSales.com Appears Ready to List
. Okta Prepares to Reveal Public Identity
. Palantir Wants to Stay Private
. Nutanix Files for IPO
. Medallia Bootstrapped First, Raised Money Later
. Slack Prepares to Communicate with the Market
. Twilio Expected to go Public Soon
. Snapchat Needs to Up Monetization ASAP
. Zscaler Sets IPO as a Long-Term Goal
. Warby Parker Should Look Before Leaping
. MuleSoft is a Unicorn, but Detailed Financials Remain Unknown
. Apttus Bootstrapped First, Raised Money Later
. Fanatics Expanding Its Playing Field
. Pinterest Finally Sees Revenues, But are they Enough?
. Tanium Bootstrapped First, Raised Money Later
. ironSource Strengthening its Revenue Generating Capabilities
. Anaplan Getting Ready to Go Public
. SecureWorks is Ready to List
. IPO-Ready Cloudera Wants to Wait and Watch
. HelloFresh Puts its IPO Plans on Hold
. Is Stripe Lining up Next?
. Qualtrics Bootstrapped First, Raised Money Later
. Skyscanner Bootstraps First from Scotland, Raises Money Later from Sequoia
. SurveyMonkey Will Likely Wait
. The Honest Company Makes the Online to Offline Model Work
. NantHealth Testing the IPO Markets, Yet Again
. BigCommerce Prepares to List
. Bloom Energy Likely to Stay Private
. Avast Software Preparing for a Listing, Yet Again
. Gusto Expands Beyond Payroll Processing
. InMobi May Have Missed the Bus
. Glassdoor Gearing up to go Public
. Human Longevity Leverages Machine Learning and Analytics to Increase Lifespan
. Blue Apron Cooking up an IPO
. Optiv Grows Inorganically
. Uber Eyeing Self-Driving
. The Trade Desk Files to List
. Deliveroo Delivers its Way to the Bank
. Selfie App Meitu Files to List on HKSE
. Apptio Files Despite Reduced Valuation and Mounting Losses
. Snap Snaps out of Chat Business to Justify Valuation
. From Bootstrapping to IPO, BlackLine Shows the Way

Hacker News
() Comments

Featured Videos