3. Stripe
Stripe is an online financial infrastructure giant, handling internet payments for many top brands, and $1 trillion a year in volume
Founders: Patrick Collison (CEO), John Collison
Launched: 2010
Headquarters: San Francisco
Funding: $2.2 billion
Valuation: $65 billion
Key technologies: Artificial intelligence, machine learning
Industry: Fintech
Previous appearances on Disruptor 50 List: 9 (No. 28 in 2023)
The interest rate environment of the past few years humbled, if not wiped out, many of the past decade's heavily funded startup ideas – but Stripe, the 15-year-old online financial infrastructure giant, is moving ahead.
It hasn't emerged unscathed, seeing its private valuation cut sharply during the startup crash. But it's fair to now say that by many measures, it's back. Stripe was valued at $65 billion as of the tender offer it completed in February, an increase from its last private valuation of $50 billion – albeit still far from its high of $95 billion in 2021. In its annual letter published in March, Stripe revealed that it surpassed $1 trillion in total payment volume in 2023, up 25% from 2022.
As Stripe likes to point out, that is 1% of global GDP, and growing. Comparatively, it took PayPal 23 years to reach that mark.
"Stripe's business is the healthiest it's ever been," president and co-founder John Collison told CNBC in April. As for valuation, "We're not losing sleep over it," he said.
Its volume has been buoyed by a pace of consumer spending that has continued to defy three years of recession predictions. Stripe's competition has benefitted from the consumer boom as well, with former Disruptors and now publicly traded companies Ayden and Block posting improved performance in recent earnings.
Stripe says it's also benefiting from a new wave of optimism in Silicon Valley, even if it isn't primarily an AI company. Fellow disruptors OpenAI and Anthropic are among the AI startups using its payment processing technology. It also updated many of its processes this year to incorporate new AI features covering payments and fraud protection.
You may not know it, but Stripe is the internet backbone behind more and more of the transactions consumers make, including recent deals with Hertz and Alaska Airlines. Other large corporate clients include Airbnb, Zara, Uber and Fox Sports. In all, Stripe says over 100 companies now process more than $1 billion per year with Stripe.
Stripe was "robustly cash flow positive in 2023 and expects to be again in 2024," the company said in its annual letter. And Stripe says it is pouring that back into "what we believe our users need 10 years from now, without regard for the natural volatility of capital markets."
The biggest issue hasn't changed: getting consumers to click "buy" at the highest rate possible. By at least one estimate that Stripe references, roughly 70% of online shopping carts are abandoned. "We obsess over eliminating barriers to internet purchases," the company's founders said in the annual report.
Meanwhile, it has moved into billing, tax, revenue recognition and a host of enterprise financial services that are distinct from the long-time focus on internet payments.
An IPO is an event that Stripe's founders continue to say is not among the goals they eye as being most important. "We have no timeline that we're announcing on being a public company," Collison told CNBC. "The thing that we were quite focused on is making sure that there is good liquidity for employees."
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This story originally appeared on: CNBC - Author:CNBC.com staff
