Stripe, the fintech and payments giant currently valued at $50 billion, seems to have always been on the brink of a public listing. But in the absence of concrete IPO moves and the transparency that the listing process brings, it has published an annual update with some new numbers painting a picture of where the company is at right now.
According to the update signed by co-founders and brothers Patrick and John Collison (CEO and Chairman respectively), Stripe processed transactions totaling $817 billion in 2022, 26% more than in 2021 (when it processed $640 billion), and its portfolio of large companies has grown. Stripe now has more than 100 businesses, each processing more than $XNUMX billion in payments through the platform.
The number of new customers is up 19% this year, with an average of more than 1.000 new businesses joining daily. And Stripe also seems to be finding its echo with new customers expanding geographically: While the US remains Stripe's biggest market, it said 55% of new customers this year came from other countries (Stripe is active in 50 markets currently).
This is the second year in a row that the Collisons have published this story (here is april 2022). They say they've been writing them for years for internal purposes, so you might think posting more openly may talk about building a more public profile. But if that is the case, it is one that is very well controlled.
You won't find simple answers to hard questions, nor much mention of the hard questions.
Stripe raised $6.5 billion at a $50 billion valuation last month, a big step down from the $95 billion valuation it was two years earlier. In 2022, the question was whether Stripe was "cheap" at $95 billion. Well, now there's an answer: now it looks like it was the opposite, that it was overvalued by about $45 billion. That raises the question of whether he's still overvalued now by $50 billion. That is a topic that is not explored in the statement.
Nor does he mention one of the biggest issues of the past year in tech: layoffs. Not only is this, and the larger layoff trend, omitted in the year under review, but Stripe remarkably doesn't include any mention of its employees, the number of employees, or its current position on hiring. Stripe hasn't been immune to these, having laid off 14% of its staff in November, so it's obviously a pretty close issue for the company and its strategy.
There are other things that would be great to know more about, like where the company currently stands in terms of revenue and profit (or loss).
Or what percentage of your business is attributable to your primary payments product these days, compared to the performance of its newer and adjacent business tools in areas like tax, fraud protection, company formation, etc.
And while Stripe has been a major story on the venture investment front for years, it's also been amassing quite a large portfolio of investments. Some of these are financial, the company has said in the past, but some could be interesting moves to help. How are you doing? Is there an overall strategy behind that activity?
One thing you can take away from the statement, although it's not explicitly stated, is that growth is definitely slowing. Transaction volumes this year may have increased 26%, but last year the rate was 60%. And 1.000 new companies per day is an impressive number, but not nearly as impressive as the 1400 per day a year ago.
Of course, part of the business expansion last year was due to the big push in online payments during the height of the Covid-19 pandemic, but it underscores how any company working in digital commerce, even the most golden of them, he still faces very different realities now, some of them quite difficult.
The company's strategy for years has been one of diversification: it has implemented many services that complement its core payments product, confident that these are a great way to build stronger customer relationships and hopefully also generate higher revenue streams. revenue and margins. It's likely something we'll see a lot more of from the company, sometimes going after the newest, shiniest concept, whether it's cryptocurrency or generative AI, or sometimes just tackling very classic pain points for those running online businesses, like collecting taxes on sales in multiple jurisdictions. .
It is clearly a massive business and a great opportunity. As Jareau Wade expounds eloquently in a recent trialStripe's impact and position in the marketplace over the past decade has certainly been enormous, but its success isn't inevitable, and with a plethora of competitors and user choice, that success may not seem like a boom in the scheme of things. broader of things. It's not something you can read in Stripe's statement, but it's a highlight.
