95 billion U.S. dollars! The 30-year-old guy founded the American super unicorn: he became the youngest billionaire in the world
The youngest billionaire in the world was born in a small village called Dromineer in Ireland.
Fifteen years ago, the two Collison brothers, who were only 15 and 17 years old, founded Auctomatic when they were in college.
This is a platform that helps eBay sellers auction items and sell them at high prices. Two years later, they sold the company for $5 million,
earned the first pot of gold in their lives, and became the youngest millionaire at the time.
In the process of starting a business, these two young people discovered the difficulties of online payment for companies and decided to create a better payment program and change the traditional financial system. In fact, online payment giants such as PayPal were already born in the United States at that time, but they did not solve the pain points of low payment efficiency.
In 2010, the two brothers graduated from Harvard University and Massachusetts Institute of Technology and founded Stripe, a digital payment company.
No one expected that after 11 years of development, the company’s valuation has reached 95 billion U.S. dollars, making it the largest super unicorn among the unlisted companies in the United States.
Patrick Collison and John Collision, these two young people just over 30, are worth nearly 100 billion U.S. dollars. Among the global unlisted companies, there are only two companies whose valuation exceeds Stripe: Bytedance and Ant Group.
Their entrepreneurial story is incredible. Who would have thought that these brothers from a small village would create an online payment giant in the future.
Soaring valuations and aggressive payment business
With a valuation of 95 billion U.S. dollars, Stripe has surpassed Musk’s space exploration company Space X, which became the largest private company backed by American venture capital after completing financing at a valuation of 74 billion U.S. dollars last month.
In addition, Stripe’s valuation has surpassed that of Facebook and Uber before it went public. Facebook’s valuation before its IPO in 2012 was more than 80 billion U.S. dollars, and Uber was at 72 billion U.S. dollars before its IPO in 2019.
“A company’s valuation is expensive or not. It cannot be judged in absolute terms. It also depends on its track, industry status, growth rate and economic model. From this perspective, Strip is already the strongest in the industry in the United States. Yes. We estimate that Stripe’s monthly transaction volume should have increased by 200% in the past year. According to the current growth rate, I believe that within 1-2 years, Stripe’s valuation will soon reach more than US$300 billion.” He Xuan Xiang Yuqiu, the founder of the capital, told VentureBang.
In fact, during Stripe’s financing process, its valuation has experienced two significant increases. Once in 2018, Stripe’s valuation reached 20 billion U.S. dollars after receiving 245 million U.S. dollars in financing, which doubled its valuation compared to the 9.1 billion U.S. dollars raised in 2016.
The other time was after receiving 250 million U.S. dollars in financing in 2019, the valuation jumped directly from 22 billion U.S. dollars that year to 35 billion U.S. dollars. In this latest round of financing, Stripe’s valuation has soared by 160% compared to the 36 billion U.S. dollars raised in April last year, a surge of nearly 2.6 times.
For Stripe, 2018 is a very critical node. Because of the cooperation with Alipay and WeChat, Stripe has further broadened the scope of business, and more importantly, the improvement of payment infrastructure has solved the slow and complex pain points of corporate online payment. .
With the soaring valuation, Stripe has also become a very attractive venture capital target. Stripe’s early investors include Elon Musk and PayPal co-founder Peter Thiel, as well as Silicon Valley’s well-known start-up accelerators Y Combinator, General Catalyst, and Sequoia Capital.
However, this invisible payment champion is not well-known in the Chinese market.
In fact, Stripe is a to B financial technology company whose core business is online payment and settlement. Specifically, it is to integrate all kinds of complex payment methods into their own systems. Companies only need to add a few lines of code to their own websites and apps to achieve a variety of different payment methods without having to follow different payment methods. The bank and the card organization negotiate an agreement.
This matter may be a bit difficult to understand in China. After all, WeChat and Alipay have become the payment methods for most users. Companies only need to access these two to basically complete online payments, but this is not the case in foreign payment environments.
Cross-border payment faces a complex environment, and customers have different usage habits, including digital wallets such as credit cards, Apple Pay, and Google Pay, as well as third-party payment institutions such as WeChat and Alipay. All of these require companies to access them one by one. Stripe is similar to the identity of an intermediary in the middle.
Stripe provides very easy-to-use products and flexible solutions for different companies, so it has won the favor of many companies, including Shopify, Uber, Doordash, Instacart, and even Amazon, Google, Microsoft and other giants. client.
Stripe’s core competitiveness lies in its ability to cut into the payment pain points of small and medium-sized merchants, and use advanced technology and advanced business models to solve the problem. If Stripe maintains this technology leadership in the future, the subsequent profits will be very substantial.
Betting on the future of the Internet
Stripe defines its mission as “increase the GDP of the Internet.”
This is evident from the customer groups it serves. Stripe’s target customers are entrepreneurs or companies from all over the country such as Africa, Latin America, the Middle East, and Asia, which will force Stripe’s products to keep up with the development speed of the Internet.
On the other hand, there is still a large part of the world that is not touched by the Internet, including about 6.2 billion people who have not yet been touched by Stripe, so there is a huge opportunity hidden.
“The Internet concept of GDP is very interesting. Stripe has a significant advantage in this regard. The founders are from a technical background and usually have a very good technical team. They will personally grasp the technology and the product. This allows Stripe to quickly capture the technology. The mind of China and Taiwan.” Xiang Yuqiu, founder of Hexuan Capital, told Entrepreneur State.
In order to quickly conquer cities in the Internet field, Stripe has been constantly building its own moat, which means that the entire Internet platform must be constantly trial and error to grow.
For example, for companies with platform and market products, Stripe launched Connect, which provides different interfaces for each company to meet their needs in consumption, refunds, identity verification, transaction management, etc.; last year 9 In September, Stripe launched Relay again, began to test the social + e-commerce model, and cooperated with Twitter. In this way, the entire payment process was greatly simplified.
At the same time, Stripe is also catching up with the wave of e-commerce growth. Since the epidemic, more than 200,000 companies in Europe have registered on the Stripe platform. According to the Financial Times, Stripe earned US$20 billion in revenue in the third quarter of last year alone.
The development speed of e-commerce has surpassed the development speed of the underlying payment technology. If companies want to open a store, they must go to the bank to process the payment and establish a gateway to connect the two. Generally speaking, this process takes a few weeks, several people have to be handled in the middle, and a large service fee has to be paid. The whole process is long and cumbersome.
In this context, traditional banks based on offline services have been unable to meet the needs of the development of the digital economy. Many cross-border e-commerce companies hope to embed financial services directly in their sites, which has accelerated Stripe to a certain extent. The speed of entering the Internet financial market.
Stripe is also studying how to seize this huge opportunity and how to disrupt the industry with an open, interconnected, and rapidly expanding platform business model, so that small and medium-sized enterprises around the world can create a more complete payment ecosystem.
“There is no doubt that this company’s future growth space is definitely good.” After investing in a number of financial technology companies, Xiang Yuqiu is confident in Stripe.
Europe is the next key battlefield targeted by Stripe.
After the latest round of financing is completed, Stripe publicly stated that it will use the funds to invest in its European business and plans to add 1,000 employees at its European headquarters in the next five years to support the surge in demand.
On the one hand, whether it is in the fields of financial technology, mobile, retail or SaaS, the growth opportunities of the European digital economy are huge. On the other hand, Stripe, as a global company, has its headquarters in San Francisco and Dublin, Ireland. It has achieved good results in the United States, and Ireland, its birthplace, has naturally become the next target.
In addition, Stripe has also set its sights on Southeast Asia, China, India, and Japan. In 2016, it established its Southeast Asia regional headquarters in Singapore and launched a pilot program in Indonesia in early 2020.
The Asia-Pacific region is a hotspot for digital payments, and Stripe, which has global expansion ambitions, will naturally not let go of this fertile land.
Although the market value is close to 100 billion U.S. dollars, Stripe does not sit back and relax. Even with technical barriers,
it is still difficult to successfully win the European market.
On the runway of global cross-border payments, Stripe still faces fierce competition.
“The opponent in Europe is mainly the veteran payment institution Adyen in the Netherlands.
Its platform transaction volume in 2018 rose from 159 billion euros to 303.6 billion euros in 2020,
and the annual growth rate remained at about 28%. Adyen’s highest market value Already close to 80 billion US dollars, on the whole,
it is not too far behind Stripe.” Xiang Yuqiu analyzed.
He said that in addition to Adyen, there are US payment giants PayPal and Square, and Checkout in the UK.
These are all direct competitors of Stripe. They have their own independent base camps and it is difficult to penetrate the market.
Although they may gain a place, they are difficult to become. The leader.
According to a new market research report, the global digital market is rapidly expanding at a rate of 24% per year.
It is estimated that by 2025, the global digital payment market will reach 154.1 billion U.S. dollars.
The overall growth of the industry provides a good opportunity for the development of these digital payment platforms.
“The global online business economy only accounts for about 14%.
This proportion is still rising and will drive the growth of the online payment industry.
International mobile payment and cross-border payment financial technology companies eat up the share of traditional commercial banks.
The competitive landscape is still in the blue ocean,
and the enthusiasm of investment institutions in the field of online payment will continue to rise.” Xiang Yuqiu analyzed.
This means that there is still a big market for cross-border payment that needs to be tapped urgently.
Whether Stripe can maintain its current record and continue to improve its products and functions remains to be tested by the market.