Stripe Inc. is truly growing the GDP of the internet. But here’s why it took us so long to get onboard…
Stripe was founded in 2010 by Patrick and John Collison to make it easier for businesses to integrate payment acceptance into websites and mobile apps. Since then, Stripe has built out “the financial infrastructure for the Internet” through a full suite of global SMB and enterprise payments products, as well as a software layer of other product offerings including billing, tax, card issuing and capital. Stripe is broadly considered by its technology company peers to be one of the best product companies globally and it powers the payments systems of many of leading consumer Internet and SMB software companies.
In late 2022, we co-invested in Stripe at a $50bn valuation. A group of existing Stripe investors (a16z, Founders Fund, General Catalyst and Thrive) committed $2.75 billion, with the balance from other top venture firms and institutional allocators (e.g., Goldman Sachs).
We have long known and admired Stripe, its founders and certain of its key leaders. Historically, its financing rounds have always been extremely expensive, and we have preferred to invest in other private companies competing with Stripe in certain payments subcategories. However, the co-investment opportunity in Stripe at the $50bn valuation presented a compelling risk-adjusted proposition for our own capital as well as our clients. The revenue multiple at our valuation is actually… dare I say it, relatively cheap.
In 2023, Stripe expanded its long-time partnership with the biggest e-commerce company in the world, Amazon, and it now processes a significant portion of Amazon’s total payments volume across its businesses in the U.S., Europe, and Canada, from Prime to Audible, Kindle, and Amazon Pay. In total, businesses using Stripe processed more than $817 billion in total volume, up 26% year-over-year, according to the company.
Most recently, Stripe offered its employees a tender at $65bn valuation in February 2024, a +30% markup relative to our $50bn entry valuation. And we have witnessed secondary sales of Stripe shares at greater than $75bn valuation. Stripe has made clear it will soon decide on whether to pursue an IPO. We will share additional information in advance as we receive it, so investors remain informed.
Stripe is the backbone of e-commerce and digital payment infrastructure