independent

Wednesday 23 April 2014

Irish technology firm Stripe raises $80m in funding valuing it at $1.75bn

Peter Collison won Young Scientist Award in 2005, now Stripe seen as threat to PayPal

The Collison brothers, John (L) and Patrick (R)

STRIPE, the online payments firm founded by Limerick brothers Patrick (25) and John (23) Collison, has raised $80m in funding.

The online startup has announced it raised $80m from venture capital investors in a deal that could value Stripe at a hefty $1.75bn.

The transaction places the 90-person San Francisco firm in the rarefied company of startups valued at more than $1bn just three years after brothers Patrick and John Collison, debuted their service.

Chief Executive Patrick Collison said the lofty valuation reflected the promise shown by his company, which processed billions of dollars in payments last year for businesses ranging from Lyft, the ridesharing company, to the Museum of Modern Art in New York. The company did not disclose specific details on the total.

The startup's rapid growth has spurred talk in Silicon Valley of an insurgent threat to PayPal Inc, the eBay Inc subsidiary that has not faced serious competition in a decade.

Stripe collects 2.9pc of every transaction plus 30 cents.

"It's a nice validation of what everyone has gotten done over the last year," Collison, who dropped out of the Massachusetts Institute of Technology in 2009 to found Stripe, said of the recent investment.

Young Scientist of the Year, Patrick Collison, presented with his award after winning the coveted prize for his project, 'Croma': a new dialect in LISP. Patrick is from Dromineer, Limerick and attends Castletroy College Limerick. photo Photocall Ireland! 14/1/2005
File Pics Patrick Collison. Young Scientist of the Year, Patrick Collison, presented with his award after winning the coveted prize for his project, 'Croma': a new dialect in LISP. Patrick is from Dromineer, Limerick and attends Castletroy College Limerick. photo Photocall Ireland! 14/1/2005

Collison dodged any direct comparison to PayPal, but he said he was confident the demand for payment processing would only explode in the coming years because only 2pc of all commercial transactions take place online today.

"There should be more transactions happening on the Internet on a macro basis, whether you believe that should be 20pc or 40pc," he said. "Well, what is holding it back? Our goal is to expand Internet commerce. We approach that problem rather than the competitive angle."

Stripe announced its funding on the day when activist investor Carl Icahn called on eBay to spin-off PayPal, a fast-growing unit that has thrived while eBay has grown at a more modest pace in recent years.

PayPal's co-founder, Peter Thiel, who has backed Stripe since its early days, led Stripe's most recent funding round through his venture capital firm, the Founders Fund.

Stripe's other institutional investors include Sequoia Capital, General Catalyst Partners and Khosla Ventures.

By Ailish O'Hora (Additional reporting Reuters)

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