American technology giant Stripe, which enables websites and apps incorporate payments services into their apps via an API and a few lines of code, has raised another round of funding. This investment comes in the form of a Series D funding round of $150 million at a $9 billion valuation pre-money; $9.2 billion post-money.
In addition to that, Stripe is also getting a revolving credit facility of up to $250 million secured with J.P. Morgan Chase & Co., Goldman Sachs Group Inc., Morgan Stanley, and Barclays PLC.
With a number of investors, primarily General Catalyst (which has already funded the company before), and Capital G (new name for Google Capital), the total amount of funding San Francisco-based Stripe has received is around $460 million. The list of investors also included its former investor Sequoia Capital and others, who the company does not want to disclose.
At the peak of this shopping season, when companies like Stripe that enable transactions over Internet and take a cut on every transaction made on their platform, this is the perfect time for the company to raise funds. This move will help the company make high revenues.
FYI, it is predicted that Thanksgiving Day alone will hit $2 billion sales for the first time in 2016.
Higher revenues can further give the company an opportunity to be acquired by a bigger enterprise.
While Stripe’s main source of revenue is through taking a cut on the transactions made through its platform, the company is also working on offering some other tools to its users. These services/tools include:
- Tools to incorporate businesses from outside the U.S
- Fraud prevention tools.
- Ways of speeding up payouts for merchants and marketplaces using its platform.
The platform play helps the company both increase its margins (transactions on Stripe’s payment service alone having very small margins) and its touch-points with the customers.
On talking about where to utilise the funding, Stripe said that it will be used for acquisitions, services to help entrepreneurs run their businesses, increase their talent pool, and developing tools.
Though the company is yet to divulge what will it be launching next, co-founder John Collison said that there could be improvements in buyer and seller protection, to build more trust into e-commerce. Commenting on the same, he added,
This is an area of active development and there is a long list of things we want to do. We haven’t ruled out [launching it as a separate service] but want to see how people use it and what works and what doesn’t first.
In an interview with TechCruch, Collison said that the aim of the company is to “take out the complexity from growing your business… We are going to see this as a major part of Stripe’s product offerings in the future. It is how we think about the world. What makes life hard for businesses, and why aren’t they growing faster? How can we change that?”
Currently, the company is not divulging much on the number of users it has globally, its revenue, total funds processed through the Stripe platform. However, it is very clear that it has an extensive list of customers which include mass-market internet brands such as SAP, Macy’s, Missguided, GE, Adidas, Docusign, Slack, Medium, Daily Mail, Yelp, NASDAQ, UNICEF.