Stripe is one of the hottest companies in the start-up world. Brothers Patrick and John Collison founded the company in 2010 to process internet payments. Their start-up quickly caught the attention of Elon Musk and Peter Thiel, early co-founders of the companies that became payments processor PayPal (PYPL +2.37%).
Stripe has also attracted the attention of several other venture capital investors who see promise in the company's technology. Their interest has sent the company's private market valuation soaring.
Stripe has become a leading payment processor for merchants, especially those operating online. Its technology allows them to accept credit and debit cards, process payments from mobile wallets, and use buy now, pay later services.
Stripe gets a cut of every payment (a small flat fee and a percentage of the transaction). The company processed more than $1 trillion in total payment volume in 2023, a 25% increase from the prior year.
The company is growing rapidly as more merchants use its technology to process payments, driving up its private market valuation. Many more investors wish they could own shares of the highly valued private company.
Here's a look at how to invest in Stripe and factors to consider when evaluating the company.
Is Stripe publicly traded?
As of mid-2024, Stripe had yet to complete an initial public offering (IPO). Since it's not publicly traded, you can't buy shares of Stripe on a stock exchange.
Publicly Traded Company
Accredited Investor
Should I invest in Stripe?
While you can't invest in Stripe yet, following are some factors to consider about the company if it does complete an IPO in the future.
Is Stripe profitable?
According to The Information, Stripe turned the corner on profitability in 2023. The company grew its revenue by 35% in the third quarter of that year while generating $150 million in operating income. The company's profitability got a boost from its cost-cutting efforts in 2022.
Stripe is also generating positive cash flow. According to its annual letter, it hit that level in 2023 when it was "robustly cash flow positive." Stripe expected that trend to continue in 2024. The company's ability to produce cash reduces the need to go public to raise funds. It has reached the point where it can internally finance growth.
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Stripe's revenue
Stripe doesn't publicly disclose its revenue. However, a report by the Financial Times indicated that the company recorded $1 billion of net revenue in the third quarter of 2023. That implies it's on a roughly $4 billion annual net revenue run rate.
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About the Author
JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Matthew DiLallo has positions in Block, JPMorgan Chase, and PayPal and has the following options: short December 2023 $67.50 puts on PayPal and short February 2024 $67.50 calls on PayPal. The Motley Fool has positions in and recommends Adyen, Block, Goldman Sachs Group, JPMorgan Chase, and PayPal. The Motley Fool recommends the following options: short December 2023 $67.50 puts on PayPal. The Motley Fool has a disclosure policy.
