Have you ever bought a gift on Amazon or ordered a takeaway from Deliveroo? If so, the chances are you have used Stripe without realising it.
Founded by Irish brothers John and Patrick Collison in 2010, the payments company has enjoyed an extraordinary boom, reaching a $36bn valuation during its last funding round – up $1bn on its last raise seven months earlier.
Stripe's payments technology is now used to process transactions worth hundreds of billions of dollars every year for more than a million companies. The firm's rapid growth has turned the Collison brothers – who grew up in rural Country Tipperary – into billionaires and major players in Silicon Valley, where they now live.
The tech giant provides technology that allows companies to process payments from customers quickly, taking a cut of around 1.4pc and a flat fee of 20p per transaction along the way. Stripe also offers a fraud detection service known as "Radar", as well as a corporate credit card for businesses in the US and business loans through "Capital". It has made big inroads against established competitors in the space, such as PayPal, by offering businesses the ability to carry out sales with a single click.
The company, like PayPal, has gone some way to dominating e-commerce payments that were at one point something set to belong to the traditional banks. Speaking via Zoom from his home in West Sussex, Matt Henderson, Stripe's boss for the Europe, Middle East and Africa regions, explains how the firm has captured a big chunk of the payments infrastructure and has earned a fortune in the process by opening up local businesses to a global audience
At a time when the shutters have come down at most retailers across Britain , access to that audience has become more critical than ever for businesses. "Covid-19 has had this impact where some offline to online behaviour has really accelerated. Trends that might have otherwise taken a couple of years to materialise have condensed into a few weeks," he says.
The 43-year old is heading up the company's rapid expansion across Europe that has seen it offer its services in five new countries this week, bringing its global footprint up to 39 territories. "People that never bought groceries online before are now doing so. Businesses that had previously been offline-only are now migrating online for the first time," says Henderson, dressed in a dark shirt and transparently-framed glasses.
Stripe, which is based in San Francisco and employs 2,000 people, is among a handful of firms that have thrived during lockdown. Since early March, the company has processed more than $1bn (£800m) of payments exclusively for new clients. Estimates from Forbes suggest the company's revenue could be as high as $3.4bn from processing $200bn worth of transactions. Those figures point to the extraordinary scale at which businesses have been forced into digitising.
Stripe has revelled in facilitating those transformations. By offering what is essentially a one-stop shop for taking payments online, it has found itself perfectly placed to rack up new business during the pandemic. "We take this role that we play in supporting the livelihood of businesses very seriously," says Henderson.
Stripe's robustness was demonstrated when it went back to investors in April, during the peak of the pandemic, for a further $600m. The additional raise, which came from existing backers like Andreessen Horowitz, Sequoia and General Catalyst, bucked the trend of downward valuations that have plagued companies in recent months. The capital valued the business at $36bn.
Will the boom for Stripe last? Lockdown has forced businesses into sizeable changes in how they operate. Some of those, the New Zealander says, will "hopefully" revert to normal. "I think you'll see a lot of changes to normality and some behaviour, so case in point, I do think that you'll see a jump in contactless payments as a proportion of the offline economy," he says. "I also think there are businesses experimenting with new online models that will be forever changed, and it will be users that forever change their behaviour."
Henderson's perspective offers a unique insight into the fintech world. Britain is home to some of the biggest names in the sector, including Monzo and Revolut, but risks posed by Brexit and the pandemic could undermine their impressive growth.
Monzo was forced to reduce its valuation in a recent funding round, while Revolut has decided to move the processing of payments out of the UK after Brexit. Despite this, he plays down the impact Brexit will have on the fintech industry. "The most likely scenario is that London continues to be a global centre for tech-driven innovation in financial services," says Henderson.
Stripe's position of power seems some distance from its humble beginnings. Its origin story – one of the best of any giant tech firm – starts with a pair of Irish teens from a small rural village in county Tipperary in Ireland called Dromineer. From there, Patrick and John Collison launched their first start-ups, aged 17 and 15 respectively. One of them, a software-as-a-service platform for eBay power sellers called Auctomatic, was sold for $5m to Canada's Live Current Media.
After brief stints in Harvard and MIT, the pair dropped out to launch Stripe with the backing of one of the world's most-famous accelerators, Y Combinator. "I think something that probably made life hard for Patrick and John was that they started really focusing on technically sophisticated start-ups who were very demanding customers," says Henderson. "But one of the consequences of that was building a product that would not only work well for these small, demanding customers, but would scale with them as they became large, demanding customers."
One such customer was Britain's Deliveroo, which experienced rapid growth using Stripe technology to become one of the best-known names in food delivery. The company thrived in a period where PayPal caused systemic headaches for start-ups due to the delays associated with paying out to businesses. PayPal's system meant that at any one time, almost a third of company revenue could be holed up for two months, which can be devastating for companies focused on cash flow.
Henderson is doubtful that Stripe is leaving any such gaps. "One thing I'd say is that it's very important to Stripe that we continue to innovate and you can see that in how we're announcing new and different products that are adjacent to payments," he says.
Henderson's CV reads like a who's who of big tech. He joined Amazon in 2004 at a time when the share price was just $31. He later left in 2011 with the share price $188, an enormous gain at the time, although Amazon's shares are now valued at $2,421.
After leaving, he went on to co-found a shopping analytics firm called Rangespan, which had attracted more than $5m in investment from UK investment firm Octopus before being bought by Google in 2014.
Google didn't just buy Rangespan, it also hired Henderson to head up product development for its global apps and retail ads for five years. "I've been lucky to work at both very large tech companies and very small tech companies like my own start-up," Henderson says, although he is reticent to divulge too much detail about past roles.
On joining Stripe, his experience as an entrepreneur had made him "mindful" of customers who are mostly people setting up their own businesses. "When you remove a fixed cost from a company's path, it's very powerful," he says.
Clearing more headaches will form the basis of Stripe's expansion. It is continuing to hire in its engineering hub in Dublin as well as in its office in London. The company is often touted as a potential candidate for an initial public offering, but Henderson dismisses the idea that it's something that will happen any time soon.
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