Stripe's breakthrough growth is not short of astonishing, and with a valuation of $95B is one of the most valuable private companies in the world. Stripe has a lot to show when it comes to building deals, partnerships, investments, and some good acquisitions lately. They have been in the news as providers of banking as a service to high-profile clients such as Barclays, GS & Citibank. They also created partnerships to expand merchant offerings and checkout platforms.
Looking at the company data, we can classify companies based on the business relationships with stripe, across domains as below
Accounting & billing
B2B payments & sales
Buy now, pay later (BNPL) & credit cards
E-commerce & point-of-sale (POS)
Accounting & billing Domains
This is a space that could define the core product that stripe offers and it has used investments and partnerships to strengthen this domain. While having inbuilt services spanning these domains such as billing and invoice services, it continues to expand its reach through multiple avenues such as integrations.
It has one acquisition in this space with TaxJar and has invested in Pilot.com (a tax, bookkeeping, and CFO software services company) as well as invested in Codat (API for SMEs to connect with customers’ accounting, banking, and other financial software).
Stripe also has multiple integrations in this space such as the subscription platform Zuora and a billing and monetization platform Aria Systems, that provides customers and seamless billing and payment service.
B2B payments & Sales domains
Currently, with no acquisitions in this space, stripe has been making significant strides through investments in startups. Early this year, the stripe was a part of funding rounds raised by Balance. It also had made seed investments in a B2B checkout and payment platform while closing a Series A for $25M in August.
Another electronic data interchange (EDI) platform Stedi has also raised a $50M Series B round with Stripe being one of the investors strengthening its global network for B2B exchange transactions. It has also built a relationship with a B2B sales and onboarding platform Accord and a partnership with a marketing and sales automation platform Keap.
With no acquisitions in the banking space, they have mainly relied on investments and partnerships in this space. They want to extend their reach into banking by
Investing in consumer payment apps, small and newer retail banks
Partnering with established banks offering banking as a service product
It has made 4 investments in type 1 strategy with companies such as Cuenca (mobile app to send/receive bank transfer, paying utilities, and making online purchases), Monzo (challenger bank), Wave(mobile-based sub-Saharan Africa based bank with a peer to peer payment system) and Step Mobile (challenger bank with a teen and parent target demographic).
One of its recent investments is in Wave where it participated in a $200M Series A round making Wave a unicorn having a valuation of $1.7B.
Stripe also enhanced its in-house offerings in this domain by launching Stripe Treasury (banking as a service API) while announcing partnerships with some of the key banks across the world such as CitiGroup and Barclays. Shopify was one of its key clients that used the Stripe Treasury product offering business checking accounts to US customers which involved a partnership with Evolve Bank and Trust.
Buy now, pay later & credit cards
This domain is seeing a lot of activity during the last one year or so and is seeing growth in funding, user adoption, and new merchants. To not miss out on any of the action Stripe has partnered with a ton of companies in this domain Four, Quadpay, SplitIt, and Alchemy Technologies. The bigger of these partnerships was with Afterpay which allows Stripe merchants to have Afterpay as a checkout option which eventually got acquired by Square for $29B.
Stripe also made some moves in the credit card space by investing in Ramp which deals with corporate card and spend management platforms with its latest $300M Series C round valuing it at $3.9B. Even though Stripe had a presence in these sectors and offered its own corporate card and spend management products, it felt they need to strengthen its grip in this domain.
E-commerce & point-of-sale domains
Stripe has its core business in the E-Commerce and POS domain and feels that international expansion is the right growth strategy.
With this in mind, they have acquired Paystack (online & offline payments) based out of Nigeria. Additionally, it made investments in other markets such as PayMongo based out of the Philippines, and Safeway in Pakistan. It has not shied away from markets such as the UK by investing in Rapyd (offers cross-border commerce) and partnerships with 2 companies in Canada. The 2 companies were Hiveway which is a digital marketplace and Lightspeed an e-com platform.
What about other focus areas?
Apart from these areas, stripe has other investments in other domains as well such as Payroll, security & workforce management. It has also committed $8M to social causes such as carbon removal.
Stripe is a leader in the enterprise segment owing to its expansion on a global scale and market reach. Payment processing has now become more of a commodity with increasing competition in the FinTech landscape, the question that pops up is does this growth strategy be as successful for Stripe in the future as it is now?
The future looks bright for Stripe as it is staying ahead of its competition using the acquire, partner, and integrate strategy to secure its place on the table.