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Fintech Company Stripe Raises $600 million

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Stripe, a fintech company that offers digital payment processing services, announced that it raised $600 million in funding at a $95 billion evaluation. Stripe has stated that this money will go towards further investments in its European operations. The company currently operates in 42 countries, 31 of which are located in Europe. Private investors are optimistic about the companies growth trajectory, citing strong year-over-year growth and data continuing to show a shift towards digital purchases over physical stores.

Evaluation Nearly Triples in Under a Year

As a privately held company, Stripe has been able to continue growing through multiple rounds of private equity funding. The company has been backed by well-known venture capitalists such as Peter Thiel and firms like Sequoia Capital in previous rounds of funding. Stripe was valued at $36 billion as recently as April 2020, when the company also raised $600 million. With this round’s $95 billion evaluation, the company has nearly tripled in value over the past year. Notable investors in this round of funding include Ireland’s National Treasury Management Agency (NTMA), which manages assets for the Government of Ireland. The NTMA investment makes sense for both sides, as Stripe has one of its headquarters in Dublin and has plans to invest a substantial amount of the $600 million into Ireland. Other investors include Allianz Group, Axa SA, Baillie Gifford, Fidelity Management & Research Co., Sequoia Capital.

Pandemic Driven Growth

Part of the reason for the increase in evaluation has been the rapid growth of the company in Europe. Since the start of the pandemic, over 200,000 new companies have signed up for the platform. Well-established and new companies alike are choosing to use Stripe’s platform in order to increase their global reach and expand their market share. In addition to an increase in revenues from new company sign-ups, revenues from existing companies have also skyrocketed as online shopping took off during the pandemic. Well-known companies that are customers of Stripe include Uber, Amazon, and Spotify. The increase of digital purchases from these online giants and other enterprise clients has resulted in staggering growth for Stripe over the past year. The company has stated that much of the money raised will be used to support “surging demand from enterprise heavyweights across Europe”

Public Debut Speculation Continues

This new evaluation makes Stripe one of the largest fintech companies to be privately held. For years, there have been rumours and speculation about an eventual IPO. However, CEO John Collision has continually stated that the company is in no rush to go public. Part of the reason that Stripe faces no urgency is its capital position. The company has stated that they are highly capital efficient and see no need to raise additional money for the foreseeable future. CFO Dhivya Suryadevara has signalled a preference for remaining private, stating that they are interested in partnering with investors that share their long-term views for the company.

Baggio has been an investor in the technology space for over half a decade. He uses the perspectives gained from his work experience in the private, public, and non-profit sectors to guide his investment strategy, with a specific interest in the potential of emerging disruptive technologies.

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