By The Hustle
Stripe, an online payment processing company, is raising $250m in new funding — bringing its valuation to $35B and making it the 3rd highest-valued US startup.
Are payment processors the new internet royalty?
Apparently so. As commerce has moved away from physical storefronts to digital spaces like in-app purchasing, payment processors are increasingly important — and Stripe has been a big player in making it happen.
Although consumers don’t see Stripe’s branding when they look at their shopping carts, more than 80% of American online shoppers have made a Stripe-powered transaction in the past year.
The transaction titans are major moneymakers. Overhead is low, and because they charge 2% to 3% on each purchase, they bring in steady revenue.
Naturally, investors want in
In 2018, more than $22B in VC went toward payment startups globally — more than 4x more than in the previous year. Stripe’s co-founders have been committed to staying private. But increasing competition might change their minds.
Though Stripe surpassed its biggest rival, Square — valued at about $25B — there’s more competition outside the ropes. Checkout, a London-based payments processor, sold a $230m stake earlier this year, bringing its valuation up to $2B. It’s ready to bring its game to the US.