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Visa pumps money into payments startup Stripe, now worth $5 billion

Stripe foundersStripeStripe co-founders and brothers Patrick & John Collison

Stripe, the hot Silicon Valley payments startup and Y Combinator alum, has taken in a round of funding led by Visa that values the company at $US5 billion.

The news was reported earlier by Re/code and the New York Times.

Stripe sets itself apart from other payments services by being the programmer-friendly backend “plumbing” that enables apps and online stores to take payments from anybody, anywhere.

Stripe counts companies like Facebook and Lyft as customers, helping them accept credit card payments while being totally invisible to end users.

It competes with the likes of PayPal Braintree, the payments juggernaut’s own developer-focused division.

Visa’s investment comes with a partnership. Basically, Stripe will take advantage of Visa’s security know-how to help protect shoppers’ financial information, and Visa will tap Stripe’s technical expertise to work on new kinds of digital payments.

American Express, too, is both an investor in and partner with Stripe, with the startup powering American Express Checkout, the company’s Apple Pay mobile payments competitor.

That report indicates that the company took in less than $US100 million in this round, which also included participation from new investor Kleiner Perkins Caufield & Byers. This news confirms a rumour that was swirling back in May.

In 2014, Stripe raised both a Series C and a “Series C-1” round, led by Founders Fund and Thrive Capital respectively, for $US150 million in financing just during that year. An additional $US100 million round would bring its total venture capital financing up to $US290 million total, with $US250 million of that raised in the last 18 months.

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