In late November, the Wall Street Journal broke the news that Stripe, a San Francisco payments processing startup, had raised $150 million in a deal co-led by General Catalyst Partners and CapitalG (formerly Google Capital), that valued the startup at $9.2 billion.
That’s just shy of double the $5 billion valuation it had achieved in 2015, when a group of institutional investors including Visa handed over $80 million.
Stripe was, and remains, the most valuable financial technology startup.
It also led Forbes to name 26-year-old Stripe President John Collison the “world’s youngest self-made billionaire” (John’s brother and cofounder Patrick is two years older).
The cash infusion put a cap on what turned out to be a big year for Stripe: Early in 2016, the company announced the launch of Atlas, a program to help entrepreneurs all over the world, including Cuba, launch their own internet businesses. Stripe Radar, a new anti-fraud tool, bolstered the company’s offerings to big businesses.
And while Stripe started off serving smaller customers, Stripe CFO Will Gaybrick says that in 2016, the Fortune 500 started coming to them. This year, Target, SAP, the NFL, and both presidential campaigns used Stripe’s services to power at least some of the payments processing they build into their apps and websites.
“The business and product grew faster than our valuation actually grew” between the two funding rounds, says Gaybrick.
Yet despite that growth, even as we look ahead to 2017, and the potential IPO boom as well-funded companies like Uber, Airbnb, and Spotify likely make their long-awaited debuts on the stock market, Gaybrick says that his company has “no plans” to go public in the foreseeable future.
“We are very happy as a private company right now,” Gaybrick says.
Room to grow
In 2016, Gaybrick says, Stripe spent a lot of its money and time on recruiting new leadership from companies like Amazon and Twitter, even as it invested its engineering know-how in the behind-the-scenes infrastructure stuff that keeps the company running smoothly. The new money is going toward furthering its international expansion, while it builds out its product to appeal even more to developers at small and large companies alike.
The reason Stripe isn’t rushing into the public markets, Gaybrick says, is simply that it doesn’t need to. As online shopping and app purchases slowly but surely makes a dent in brick-or-mortar shopping, Stripe stands to benefit. As customers like Slack get bigger, they take more payments, of which Stripe gets a cut.
While Stripe doesn’t disclose whether or not it’s profitable, Gaybrick says that the company’s history of venture capital funding is a clear sign that there’s still plenty of upside left in the business.
For instance, he says, legendary Silicon Valley venture firm Sequoia Capital has invested in Stripe in every single one of its 7 funding rounds since it left the Y Combinator program — from 2011 through this most recent event. To Gaybrick, that’s a clear sign that the firm remains confident there’s room for Stripe to keep growing privately.
As a “cash-efficient business,” and a growing one, Gaybrick says, Stripe’s challenge is less about raising further capital than it is making sure that the company is keeping its engineers and product teams focused in the right direction, as it looks for growth.
Laying the groundwork
To that end, Gaybrick says he takes a more hands-on role with Stripe’s product than most CFOs. From Gaybrick’s perspective, the big challenge CFOs will face, including himself, isn’t necessarily managing money — it’s managing the limited manpower available at any given time, and staying focused.
“[CFOs are increasingly] not constrained by capital, they’re constrained by engineering resources and they’re constrained by time,” Gaybrick says.
And so, it’s in the best interest of the CFO’s office to help ensure discipline and focus, making sure that the company is spending those resources on things that will turn into revenue for the company. It adds a “new dimension” to the job.
With 2016 fast coming to a close, Gaybrick is confident that the company made the right investments to stay competitive, whether or not it goes public.
“We’ve done a lot of preparing of the organisation,” Gaybrick says.