If you’ve ever bought anything on Amazon, Google, Airbnb, or Facebook, you’ve probably used Stripe. The payment system created in 2011 in San Francisco by the brothers Patrick e John Collison is a textbook example of what it means to launch a startup and see it grow so quickly that it beats all expectations. Today it is present on over three million ecommerce sites, from the big giants of online commerce to small local craft shops. In ten years it has reached a valuation of 95 billion dollars, after having raised 2.2 million from 39 investors, including the co-founder of Paypal, Elon Musk.
But the story of the Collison brothers’ serial entrepreneurs is also a textbook. From Limerick, a town of 90,000 inhabitants in the southwest of Ireland, they flew to Silicon Valley in their twenties to participate in the acceleration program YCombinator, the most coveted in the world for those who want to launch an innovative business. There they created their first startup in 2007, Auctomatic (an online sales software), which they sold two years later for $ 5 million. The lesson they learned from their first entrepreneurial adventure, they told in an interview with Wired in 2018, was: the hardest thing when creating a company is not having an idea, or making it come true, but “finding a quick and effective way to collect customers’ money. ” Patrick Collison will be a guest of the Italian Tech Week which will be held on 29 and 30 September in Turin.
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The birth of Stripe: unlocking the potential of ecommerce
It is therefore no coincidence that their second startup was Stripe. A fintech, a startup that deals with technological solutions for finance. They founded it with the money obtained from the sale of Auctomatic. The goal that the Collison brothers have set for themselves since its foundation was: to make ecommerce take off, the online payment process must be simplified. No more difficulties or delays in transactions, no more subscriptions, hidden commissions or intermediaries.
Stripe was able to solve all those steps that made payments complicated. As the two founders have said on occasion, Stripe must “make accepting online payments as easy as posting a video on YouTube”. Upload everything in one click.
Stripe, the record-breaking electronic payments platform: worth 95 billion dollars, beats Facebook and Musk
Successful goal. Eleven years later Stripe continues to be among the fastest growing companies in Silicon Valley. It has obtained billions of investments from institutional and venture capital funds, with a valuation after the last round of 2021 that left many Bay Area experts in disbelief, touching the 100 billion mark. Today it has around 1,300 employees and over a million customers in 120 countries.
The meeting with Musk and Thiel: “Paypal is gone”
The Collisons have been working with their team for years to find an adequate solution to the problem they intended to solve. It is said that they had a clear idea of the path to take after visiting the headquarters of PayPal. There, they would have noticed that there were problems with online payments that were not yet resolved. Stripe could be the solution.
“We wanted it to be extremely simple to integrate. We wanted credit cards to be accepted immediately. There should be no excessive time, nor excessive latency between payment and approval. You don’t have to talk to anyone to pay. And the information to be provided no longer had to be long pages, ”Patrick said in an interview with Fastcompany in 2012.“ Google Checkout and PayPal are confusing systems and we asked ourselves: why don’t they solve these problems? What’s wrong with them? ”.
Trade magazines are full of anecdotes about Stripe’s first steps. The visit to Paypal seems to almost lead to myth. In front of the Collisons, two prominent names from the Valley: Peter Thiel and Elon Musk. It seems that they got out of it quite shaken and that they would have said: this company is old and run down. But then Musk and Thiel had the courage to ask for money to launch their idea of a payment company. They got them. Thiel and Musk were the first to give the Collisons the money that led their first round of investment: two million, along with giants like Sequoia Capital and Andreessen Horowitz, backer of Facebook, Instagram and Slack. After two years, Stripe became Paypal’s main competitor. A patricide.
How Stripe Works
Stripe was developed to allow you to integrate different payment methods of an ecommerce, in a marketplace or in an app. The goal is to ensure that every company has a flexible tool capable of adapting to every habit of online customers, in every part of the world. It is a cloud platform. Once its interfaces have been integrated into a company’s software, it allows you to activate the desired payment methods from the portal. That is: a merchant via Stripe can enable customers around the world to pay with their preferred method, in the currency of their choice. In return, the company charges a fee for payment processing and fees 2% on the mid-market exchange rate if currency conversion is required. Its strength lies in the ease of integration of the sites, but also in its ability to make itself effective both for the giants of online commerce and for small and very small companies that sell their products online.
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Company after company, startup after startup, Stripe has built a huge network of customers. It all started with the startup founders who grew up with them at Ycombinator. “It worked a bit like word of mouth”, the two brothers later told Inc. “It seemed incredible, the people who adopted our service were increasing day by day, by person in person”. The number of customers grows, the attention of investors begins. In 2012 it is already worth 500 million. Then the climb. New companies followed investment rounds. The need for a fast and effective payment system was felt. The future was already beginning to take shape as a story already written.
The push of the pandemic, the explosion of ecommerce makes Stripe fly
The market was already there. The pandemic has made it even bigger. Someone had to get it. He explains it well John Collison in the note in which the company announced a 600 million investment round in 2020: “Today, people who never dreamed of using the Internet to go to the doctor or to do the shopping, do so out of necessity. And companies that have postponed when they should have gone online, or that had no reason to go online, made the leap pretty much overnight. “Suddenly, a huge piece of land had become a boundless prairie. In the words of his brother Patrick: “I don’t think the internet is the solution to everything. But I am very optimistic that it will increasingly be an enabling factor for every aspect of the economy ”.
Stripe has become an essential tool for a good chunk of ecommerce. His solution has surpassed other payment instruments in the field, starting with the patricide committed against PayPal. Sure, Ebay’s payment giant continues to exist. As well as pitfalls come from solutions such as Square, Adyen o WePay. But today the company founded by brothers born in the west of Ireland is a giant with its feet firmly planted on the ground. And not many believe they are made of clay.
Stripe: the digital payments platform, lands in Italy
