As the golden child of international financial technology companies, Stripe has had a profound impact on the sector globally, helping to take financial technology mainstream.
The US company was founded by two Irishmen.
Although undoubtedly a US company, Stripe’s Irish roots ensure it garners plenty of column inches on this side of the Atlantic and has, in the past number of years, helped bring financial technology (FinTech) to the masses.
“FinTech is now very mainstream, the investment numbers in FinTech are just astonishing.
“The likes of Stripe obviously, in Ireland, get a lot of coverage because they’re Irish guys doing really well and they have some Irish investors that helped them get started,”said financial technology specialist Garrett Cassidy.
The Collison brothers, Patrick and John, positioned their Silicon Valley start-up smartly to begin with, aiming to compete not so much with the market incumbents but instead focusing their efforts on increasingly moving commerce online.
According to Hemant Taneja, one of Stripe’s early-stage investors, a conversation with Patrick shortly after Stripe started out saw an estimate of just 2% of commerce being conducted online bandied about.
It doesn’t take a genius to see the potential that lies in increasing that percentage but perhaps it did to position a young company as the go-to guys to make it happen.
The Collisons set about making online commerce as straightforward as possible and in doing so began to attract customers pretty quickly.
“Their target was to make it easier to get commerce online. The opportunity that they see and their investors see is such a tiny proportion of commerce is online.
“They’re not interested in off-line commerce, they’re operating at an interesting intersection of e-commerce, online and mobile. They started off being the easiest way to take credit cards and they got themselves viral in the development community. So you can open a Stripe account in minutes because they already have the infrastructure there. The software is really easy to use,” said Mr Cassidy.
Since those early days, it has added another string to its bow becoming the partner of choice for global giants from Twitter and Facebook for which they’ve helped develop ‘buy buttons’; to Apple, American Express and now Visa.
The major card companies want to do business with them rather than with PayPal which would rather cards were taken out of the equation entirely.
All of which led to a €4.5bn valuation on the back of its latest funding round of less than €92m.
Which, in turn, begs the question as to whether or not Stripe, despite all its success, is really worth its price tag or if it is symbolic of a wider valuation bubble.
“I don’t think it is [a bubble]. It’s more likely there’s a broader internet bubble than a FinTech bubble. There’s huge scope [to grow] and in reality most of what’s happened in FinTech to date has just been scratching the surface; people really feel like this is the beginning of a journey, said Mr Cassidy.
“Whether Stripe is worth €5bn, who knows? Stripe is worth whatever someone will pay for it.”
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