On Tuesday, Stripe announced a $250 million investment round led by General Catalyst, Sequoia, and Andreessen Horowitz. This funding comes before new capital inflows and pushes the company’s valuation to $35 billion—an impressive leap from its previous valuation of $22.5 billion, driven by a significant rise in B2B payments.
Stripe has surpassed other high-value companies like Airbnb and SpaceX, securing the third spot on the list of the most valuable venture-backed businesses in the U.S. Amid rumors of Juul’s declining valuation due to health concerns related to its e-cigarette vapors and WeWork’s valuation drop to $10 billion ahead of its IPO, Stripe stands poised to claim the title of the most valuable venture-backed company in the country.
Founded by Irish entrepreneurs Patrick and John Collison, Stripe offers a suite of payment tools that help e-commerce businesses and online marketplaces conduct secure credit card transactions, accept customer payments, and transfer funds to third-party vendors who list goods or services. Based in San Francisco, the company is also backed by top venture capital firms such as GV, Khosla Ventures, and Kleiner Perkins, along with prominent PayPal founders Peter Thiel, Max Levchin, and Elon Musk.
Since its founding in 2010, Stripe has raised approximately $1.2 billion and, according to The Wall Street Journal, currently has no plans to go public. This funding announcement comes just two weeks after Stripe revealed plans to launch corporate credit cards and lending tools for small businesses on its platform. Additionally, the company expanded its services into eight more European countries last Monday.
Investor interest in the B2B payments sector has grown significantly as startups continue to develop emerging technologies and expand their service offerings—including electronic invoicing, cross-border payment networks, blockchain-based B2B solutions, payment analytics, and virtual payment cards.
According to PitchBook data, since early 2015, VC-backed companies in the B2B payments vertical have closed 15 major funding rounds in the U.S.
While Stripe’s new funding round is noteworthy, AvidXchange, based in North Carolina, still tops the list in deal size, having raised $300 million in 2017. AvidXchange specializes in invoice automation software and bill payment processing. Another frequently mentioned startup is Brex, which provides corporate credit cards to startups and other businesses. Supported by investors like Kleiner Perkins and DST Global, Brex launched in June 2018, is now valued at $2.6 billion, and recently opened a restaurant in San Francisco’s South Park neighborhood.
Another notable startup is Marqeta, which helps third-party clients like DoorDash and Instacart with the distribution, processing, and management of payment cards.
Since 2010, several high-profile VC firms and angel investors have been notably active in the B2B payments sector in the U.S. According to PitchBook, Kleiner Perkins—which has invested in both Stripe and Brex—leads with 12 deals, followed by Max Levchin, 83North, and August Capital, each with nine investments.
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