The payments company Stripe said a new round of funding increased its value by more than half, as the largest private US fintech company moves into small business lending.
Backers including Andreessen Horowitz, General Catalyst and Sequoia Capital invested $250m of new money that valued Stripe at $35bn, the company said on Thursday.
Stripe, which received a valuation of $22.5bn in January, processes hundreds of billions of dollars in payments annually for many of the largest internet-based companies, including Amazon, Airbnb and Uber. The company has grown rapidly as brick and mortar retailers increasingly generate sales through online credit card purchases.
Stripe announced last week it had started a Stripe Capital line to make loans to small businesses and begun offering no-fee corporate cards. The expansion places it in competition with other payments companies such as PayPal and Square that have also moved in recent years into making loans to their customers.
It will also be competing with the buzzy newcomer Brex, which offers corporate cards to start-ups and was valued at $2.5bn following a $100m round of funding in June, about a year after beginning to offer the product.
With the new round of money, backers valued Stripe higher than many other well-known start-ups including the accommodation rental site Airbnb and Elon Musk’s SpaceX.
Venture capitalists have been placing large bets this year on start-ups trying to unseat traditional lenders and other financial services companies. Private fintech companies raised $15.1bn during the first half of this year, including a record number of so-called mega-rounds topping $100m in the second quarter, according to CB Insights data.
Stripe’s new valuation is about $10bn higher than the public market capitalisation of Square, whose core business is selling physical credit card processors to small businesses, but which has also moved into lending and, most recently, into mobile payments through its Cash App.
Max Friedrich, a fintech analyst at ARK Invest, which has invested in Square, said Stripe may struggle in a fintech market where players are increasingly moving into each other’s territory.
“Square has the unique opportunity to at some point merge its two user ecosystems, merchants and Cash App users, which would release value other payments-only companies like Stripe are unable to obtain,” Mr Friedrich said.
John Collison, co-founder of Stripe, said the company was “investing now to build the infrastructure that’ll power internet commerce in 2030 and beyond”.
Stripe has now raised a total of $1.15bn from private investors since its founding in 2010. Mr Collison, who runs the company with his brother Patrick, said in February it had no plans to go public.