US fintech startup Stripe has picked up more funding of its own in the latest round, placing the company at a better position to widen its reach to new markets globally and acquire bigger customers.
Stripe announced that it has raised $245 million in funding which values the San Francisco-based firm at $20.25 billion, significantly surpassing its previous round in 2016 when it was valued at $9.2 billion.
Stripe co-founder John Collision stated that they are fortunate to be in a position that the business is performing very well and the long-term opportunity is that they are very optimistic to providing the richer stack to companies.
The recent funding round was led by hedge fund Tiger Global Management, along with new backers including DST Global and Sequoia.
Expanding to New Markets
Stripe plans to use the funds to fuel expansion in main overseas markets like Southeast Asia and India, where it intends to look into the growth of the e-commerce industry to expand its payments products.
The company said over 500 million people in Southeast Asia and India are expected to become online customers in the next three years. It also estimated there will be $4 trillion online sales globally by 2020.
While payments is Stripe’s forte, it has also been diversifying and is now running Stripe Issuing, Stripe Terminal, fraud detection, and potentially cash advances among its various services. These have helped the firm establish strong relationships with its customers.
The online payments provider currently operates in 25 countries, charging a fee per transaction processed via its platform. Its products have widened to include credit cards, subscription-based billing, and debit cards.
Stripe will also use the funding to employ more people for its distributed global engineering team and set up a new engineering hub in Singapore. The group currently has hubs in San Francisco, Seattle, and Dublin.
Engineering has been a key part to Stripe’s growth from the start, up to now with its products serving as proof, offering businesses easier means to accept online payments and bill customers.
Moreover, major tech company Alphabet Inc.’s Google LLC, ride-hailing firms Didi Chuxing Technology Co. and Uber Technologies Inc., as well as music-streaming service Spotify Technology SA has just been added to Stripe’s millions of customers.
That just show how the eight year old company is targeting a new market of bigger businesses.
After launching in 2010, Stripe quickly became the payments service provider for other Silicon Valley startups, offering a fast and fairly simple way to collect payments from customers without having to go through traditional banking processes which tends to be expensive.
Collison said they think the investment will be helpful as they continue to march upmarket and serve these larger companies. Collison also stated that the company has no plans to go public.
Stripe in July entered into a partnership with online payment platforms Alipay and WeChat Pay to allow businesses utilizing its platform globally to accept payments from hundreds of millions of Chinese consumers.
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