What is Stripe and why is the State investing $50 million in it?
Beginners’ guide to firm founded by billionaire Irish brothers Patrick and John Collison
Stripe founders Patrick and John Collison.
Who are Stripe?
Founded in 2010 by Irish brothers Patrick and John Collison, Stripe is an online payments company that has just been valued at $95 billion (€80 billion), making it the most valuable privately-owned company in Silicon Valley.
What does the company do?
The company found early success by coming up with a simple way for start-ups to accept online payments with just a few lines of code. Since then it has developed a range of products that make it easier for companies doing business online.
Stripe’s technology now handles hundreds of billions of dollars in transactions each year for its clients, which includes many well-known brands.
What is the Ireland Strategic Investment Fund?
The Ireland Strategic Investment Fund (Isif), which is managed by the National Treasury Management Agency, is the State’s sovereign wealth fund. Its mandate is to invest on a commercial basis in a manner designed to support economic activity and employment locally.
Why is it backing Stripe?
The fund has just invested $50 million (€42 million) in Stripe. As well as being a potentially smart investment, given how fast the company is growing, Stripe has also promised to create more than 1,000 jobs locally. It currently employs about 2,500 people globally, with 300 of these in Dublin.
Is Stripe creating jobs only because of the Isif investment?
While this is no doubt a factor, the Collison brothers regard Dublin as an important hub for the company. It set up an international engineering hub – its first outside the United States – in Dublin to take advantage of the city’s strength for attracting tech talent.
How much is Isif’s stake in Stripe worth?
Isif has paid $50 million in return for a stake worth less than 1 per cent.
Where are the Collison brothers from exactly?
They were born in Limerick but reared nearby in Dromineer, Co Tipperary.
How did they first gain attention?
The brothers were early bloomers, with Patrick winning the Young Scientist competition in 2005 at the age of 16. The siblings became millionaires three years later when their first company, Auctomatic, was acquired for more than €3 million.
What happened after this?
They founded Stripe two years later, which became a tech unicorn – that is a privately-owned company worth more than $1 billion in 2014. John was named the world’s youngest self-made billionaire two years later at the age of 27, when Stripe was valued at $9 billion.
How much are they worth now?
Forbes magazine estimated the Collison brothers were worth $3.2 billion each earlier this year, putting them at joint 616th on its rich list, which numbers almost 2,100. However, following the new funding round it is likely they are worth many more times this now.
Are they continuing to grow?
And then some. Stripe was already growing fast prior to the Covid-19 crisis. Since then it has seen a massive surge in business as more companies rush to beef up their online presence.
So: what’s next?
The Collisons say their aim is to “grow the GDP of the internet”. They claim that they are just getting started because while many more of us are now shopping online, it still represents only a fraction of overall spending.