Stripe is a payments and fintech giant that is estimated to be worth $50 billion. In its most recent annual update, Stripe revealed that it had processed transactions totaling $817 billion in the year 2022, marking a 26% growth from 2021 when it processed $640 billion. Stripe also has more than 100 companies each processing more than $1 billion over the platform. An average of 1,000 new businesses joined Stripe every day in 2022, with most of them (55%) coming from countries other than the US.
The Co-Founders and brothers Patrick and John Collison are the ones behind the annual update. They have been publishing it for years but only recently made them publicly available. Although the letter included new numbers, it did not reveal many other details such as revenue and profit, percentage of business attributable to its core payments product, and its investing strategy.
Amid the last year’s layoffs trend, Stripe also experienced its own as it let go of 14% of its staff in November. This was a major step down from its earlier $95 billion valuation in 2020, and a subsequent drop to $50 billion valuation in 2021. This again raises the unanswered question of whether Stripe is still overvalued at $50 billion.
The letter also did not touch on the growing competition that Stripe is facing and it could be a cause for worry for them in the long run. Furthermore, the significant slowdown in growth of 26% in 2022 from 60% in 2021 could be a cause of concern. Since growth in 2021 was buoyed by the surge in online payments due to the Covid-19 pandemic, the slower growth rate could be a sign of the changing reality that any digital commerce business is increasingly facing.
Stripe has been relying on diversification, launching services that compliment its core product to build stronger customer relationships and generate higher revenue. The result of this strategy will also be interesting to observe in the coming years.
Jareau Wadé in his recent essay studies and explains the impact and position of Stripe in the market. He also notes that Stripe’s success is not guaranteed and the competition could be a cause of worry for the company. He points out that despite its golden run, Stripe might not experience a boom in the larger scheme of things.
Stripe has gone through immense changes in the past few years and it will be interesting to observe the steps it takes to continue its success.
