Stripe raises more funding to pursue acquisitions, expansion

Dive Brief:

Stripe has raised $150 million from multiple parties, including CapitalG, the investment arm of Google's parent company, in a funding round that left the payments startup with a market valuation of about $9.2 billion, up from $5 billion in mid-2015, Bloomberg reports.
The round, led by CapitalG and venture capital firm General Catalyst Partners (and also including existing Stripe investor Sequoia Capital), is earmarked to support Stripe's plans for acquisitions and international expansion, according to The Wall Street Journal.
Stripe also received a revolving credit facility of up to $250 million from JPMorgan Chase & Co., Goldman Sachs Group, Morgan Stanley, and Barclays Plc.

Dive Insight:

Reports have varied in recent months about exactly how much money Stripe has raised, and this most recent $150 million infusion seems to put the total to date at around $450 million or slightly more. To say that Stripe has become a darling of big-time investors may be an understatement, considering it has raised a lot of its funding at a time in which venture capital activity has been notoriously slow. Capturing the notice of CapitalG, the named-with-a-wink financing unit of Google parent Alphabet, is another major step forward.

So, what happens now? A Stripe official told The Wall Street Journal that the company wants to pursue some acquisitions and funnel some money into further international expansion. These moves likely will be necessary as Stripe looks to catch up to PayPal, a company often mentioned as its main rival, and Square, the company with which it is most often mentioned in the same breath (at least in part because their names sound so similar that someone may start talking about one before realizing they mean the other).

PayPal remains a massive competitive target even at a time when it has struggled a bit, but Stripe is making an impact, having won relationships with retailers like Target and Macy's, as well as Facebook.

Also, the estimates of Stripe's market valuation suggest that the startup is now worth twice as much as Square, which had its IPO a year ago this month. It fair to wonder is a similar plan is now brewing for Stripe. As some reports have noted, that might be part of the reason that Stripe has been able to keep raising money — because investors are looking forward to an eventual IPO.