Editor's note: Inc. magazine's 2018 Company of the Year is Bird. Here, we spotlight a contender for the title.
Seven lines of code--and a vision for democratizing online payments--served as the impetus for Patrick and John Collison to launch Stripe. Today, that code has expanded along with the entrepreneurs' vision for the now $20 billion company.
Since 2010, San Francisco's Stripe has been helping businesses better integrate banking or credit card systems online. This year, the Collison brothers are doubling down on that mission--releasing a handful of products geared specifically at making transactions easier for entrepreneurs in both the online and offline world.
"I think this is really the year when it became clear how the whole picture fits together," says Patrick Collison, Stripe's CEO. "We had a sense for where we wanted to go and what we wanted to build and really started."
Leveling the Playing Field
On top of system improvements allowing customers to better accept recurring revenue and invoices, in October the company announced the creation of Terminal, a payment system for brick-and-mortar businesses that includes card readers. It's a way for Stripe to stay with its customers, who are increasingly taking their online operations to the real world.
In the same month, Stripe partnered with the World Bank to produce the Digital Entrepreneurship Index that will aggregate the self-reported experiences of business owners. The Index, which the company aims to release annually, is also intended to help policymakers work to improve the landscape for entrepreneurs in their respective countries. Stripe also raised $245 million in a Series E round that closed in mid-September, valuing the company at $20 billion. Two years ago, it was valued at $9 billion.
"We want to create a more level playing field where opportunity can be pursued," Patrick Collison says. "All this is situated in our larger, long-term goal of building mobile economy infrastructure and enable entrepreneurs everywhere."
Stripe also announced this year that Singapore would become the company's fourth engineering hub--its existing locations are in San Francisco, Seattle, and Dublin, about 110 miles from the founders' hometown of Dromineer, Ireland.
Vision for Payment
The year certainly brought missteps, too. But the company worked to fix them. In January, Stripe ceased accepting bitcoin as a form of payment after cryptocurrency prices became increasingly volatile.
Some analysts are also skeptical of the founders' foray in offline payments. Brendan Miller, a principal analyst at Forrester Research, suggests that the company will have tough competition from the likes of Square and PayPal, which have long made credit card readers for brick-and-mortar businesses available. However, Miller praised the brothers' focus on one industry and said that will reduce the company's risk of failure.
"They've stayed very close to a simple payments model, and that's been their power, so I'm very bullish on the company," Miller says. "Patrick Collison is a genius. I've met a lot of people in this space, but his vision for payment and his company is clear, simple, and direct, and it's really refreshing to see that in a CEO."
Patrick and John Collison hail from central Ireland, where their parents were also entrepreneurs, and attended MIT and Harvard, respectively. While in school, they developed iPhone apps and created a way to manage eBay auctions, which sold for $5 million in 2008. The next year, they both dropped out and began working on Stripe.
Stripe is the financial system for more than 100,000 companies, including mom-and-pop shops along with tech giants like Lyft and Facebook. It stores financial information, assists with fraud detection, and works with companies to add new forms of payment, like Apple Pay. To make money, it charges a 2.9 percent fee on credit card payments and 30 cents per successful card charge.
Stripe won't disclose the number of transactions it processes or its annual revenue, but experts told Bloomberg last year it handles about $50 billion in commerce annually and is likely booking about $1.5 billion in annual revenue.
Patrick Collison doesn't shy away from the fact that his company's list of new services and tools may sound unglamorous, but he insists they are the infrastructure for entrepreneurial success.
"The themes we've talked about since the beginning are creating opportunities," Patrick Collison says, "and trying to accelerate the progress of tech in the world around making incumbency less of a competitive advantage."