Stripe’s Growth Strategy Culminates In Fitting Valuation

Stripe is growing at three times the rate it was this time last year, thanks to the deployment of a growth strategy that has enabled the payments giant to outpace its competition in what has been a big year for the fintech space.

Just last month, Stripe was given a reported $115 billion valuation by investors according to a Forbes report, compared with last April’s valuation of $36 billion. This valuation was given by investors in “secondary market deals.” Today, Stripe’s market cap now tallies up at one-third of that of global leader PayPal. It was also shared that Stripe may have a new primary funding round in the works. The same report shared that in 2019, Stripe processed between $200 billion and $250 billion in transactions. Since capitalizing on the online shopping trend, Stripe’s numbers are only set to grow alongside its host of new services and plans for a steady trajectory.

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Stripe’s success comes from keeping its finger on the pulse of consumer demands and being prepared to expand its company in new directions at every turn. In 2020, major announcements highlighted the company’s growth strategy. A big one was the announcement of Stripe Capital, an arm of the business that aimed to redefine digital business finance and lending through its online platform. Near the end of the year, Stripe Capital extended to enable its business clients to offer financing to their customers by providing its platform with an end-to-end lending API through which financing options are offered. This provides relief to what Stripe outlined as a key issue faced by small businesses: ready access to capital for growth. The company also bought a growing Nigerian start-up in a bid to expand to one of the fastest growing, underserved regions for fintech.

Closing off 2020, Stripe announced Stripe Treasury, a venture that will pair with major banks and financial institutions to issue debit cards, bank accounts, and other products to the online merchants who rely on Stripe’s processing platform. Alongside this, Stripe announced that Shopify became a customer of its online banking services. With Stripe, Shopify’s hundreds of thousands of clients will instantly benefit from the payments and financing infrastructure, which includes instant access to funds that come through. Shopify clients will also have access to interest-bearing accounts eligible for FDIC insurance in mere minutes.

Stripe’s upcoming valuation may seem like sudden parabolic growth. However, its keen eye toward strategy has well positioned it for growth since its inception. Whether it is working with major banks, expanding into new regions, or developing better technology to more accurately meet needs, Stripe will do whatever it takes to ensure seamless end-to-end digital financial services in the interest of businesses and consumers.