Stripe's valuation nearly doubles to US$9.2b with latest funding

[SAN FRANCISCO] Digital payments company Stripe Inc has raised a fresh round of funding that nearly doubles its valuation to US$9.2 billion, the company said on Monday.

San Francisco-based Stripe raised US$150 million in a funding round that closed this week, said chief financial officer Will Gaybrick. The round brings the company's total fundraising to US$450 million.

After its previous funding round more than a year ago, Stripe was valued at US$5 billion. Its new valuation of US$9.2 billion makes Stripe among the world's highest-valued 'fintech' startups backed by venture capitalists.

Fintech loosely refers to companies using technology to reinvent financial services.

Stripe facilitates online payments for companies and organisations ranging from Target and Lyft to Twitter and the Girl Scouts.

The funding round was co-led by CapitalG, the venture capital arm of Alphabet Inc, and General Catalyst, with participation from existing investors including Sequoia Capital, Gaybrick said.

Separately, Stripe said on Monday it received a credit facility from banks including JPMorgan Chase & Co, Goldman Sachs Group Inc, Morgan Stanley and Barclays Plc, but declined to disclose the value.

The new financing comes as other fintech startups face a cooling funding climate. The third quarter this year brought a slump for North American fintech companies, with US$900 million invested across 96 deals, down from US$2.8 billion across 118 deals in the third quarter last year, according to venture capital database CB Insights.

Stripe, founded by brothers John and Patrick Collison in 2010, has raised less money than some of its fellow private tech startups with similar valuations.

Music company Spotify, for instance, has raised about US$1 billion for a US$8.5 billion valuation. Theranos, the beleaguered blood-testing company, raised roughly US$750 million for a US$9 billion valuation.

But Stripe is growing globally, now in 25 countries, and needs to hire workers and set up more offices as it competes with PayPal Holdings Inc, Square Inc and other more established payments players.

Stripe is also expanding its reach with a program called Atlas, which allows young businesses in countries such as Cuba and Turkey to incorporate and open a bank account in the United States, and use Stripe to begin receiving payments over the Internet.

The Wall Street Journal first reported news of the latest funding round on Friday.

REUTERS