$95 billion Stripe wants to offer everything from corporate cards to tax advice. Here are 9 ways it's looking to grow — and the fintechs it's competing with.

• Stripe was just valued at $95 billion following a $600 million Series H announced March 14.
• All signs point to an IPO, but the payments giant continues to shy away from the public markets.
• Experts say Stripe’s offerings outside of payments may be an effort to diversify revenue before an IPO.
• See more stories on Insider’s business page.

Stripe, the payment-processing fintech giant, has become one of the most anticipated and elusive IPOs in Silicon Valley.

But still, the startup continues to raise massive rounds in private markets. On March 14, Stripe announced a $600 million Series H at a $95 billion valuation. It’s one of the highest-valued private tech startups in history, surpassing SpaceX’s current $72 billion valuation and Facebook’s pre-IPO valuation of around $80 billion.

All signs point toward an IPO, from its sky-high valuation to notable c-suite hires. In the last year, Stripe nabbed former GM exec Dhivya Suryadevara to serve as CFO and AWS’ head of sales and business development, Mike Clayville, as its chief revenue officer.

Stripe has also looked to expand globally, particularly in Europe, a market Suryadevara previously told Insider could be “as big, if not bigger” than its US footprint. 

Yet John and Patrick Collison, the brothers who co-founded Stripe in 2010 and have a collective net worth of $23 billion, have remained notoriously coy about a public markets debut.

Perhaps the most telling indication of Stripe’s public ambitions are the fact it’s spent the last few years diversifying its offerings. In recent years, the fintech has looked to move beyond its bread-and-butter business of helping merchants accept payments online. 

“It is remarkable how quickly Stripe is able to spin up new products outside of payments,” Ashley Paston, an investor at Bain Capital Ventures, told Insider via email. 

Since 2018, it’s launched lending, corporate cards, card issuing, and other services like fraud monitoring. There’s also Atlas, which helps entrepreneurs quickly spin up and incorporate companies of their own. And the fintech has also launched its own venture arm.

Across all those products, “Stripe has and will continue to cross-sell additional products with ease,” Paston added.

Adding services is key when serving larger, more complex merchants. In the last year, Stripe won luxury goods purveyor LVMH, shipping giant Maersk, and Volkswagen. Nearly all of its enterprise customers (96%) use multiple Stripe products and 84% operate in multiple countries, a spokesperson told Insider.

Today, revenue from enterprise customers is Stripe’s largest and fastest-growing segment, and it counts more than 50 companies processing over $1 billion annually as customers.

Experts say these add-on offerings and new market entries may be an effort to show revenue diversity ahead of going public.

One industry insider drew parallels to another player in the payments space. 

“When Square went public, the early success of their Capital business played an important role in proving the diversification of the company’s revenues beyond payments,” Dan Rosen, partner at Commerce Ventures, told Insider via email, citing the launch of the payment giant’s business lending offering in 2014, roughly a year before it went public. 

“Stripe may be waiting to be able to show a similar sign of revenue diversification,” he added.

Square, which currently has a market cap north of $100 billion, went public in November 2015 at a $2.9 billion valuation. While it got its start in point-of-sale products for small businesses like coffee shops, Square has since acquired Cash App, a personal finance app, and built offerings to support business banking, too.

For Square, non-payments revenues have seen strong growth. In 2020, subscription and services-based revenues were up 49% year-over-year, growing faster than Square’s transaction-based revenue. Cash App, too, saw 440% growth in revenue at 168% growth in profit year-over-year in 2020.

Still, it’s one thing to roll out new lines of business. It’s another for them to successfully grow. For Stripe, which doesn’t disclose financial performance, it remains to be seen how material these new revenue streams are compared to its payments business, a model built on transaction fees.

Total payments volumes have continued to rise, especially online. But across the payments industry, there’s downward pressure on transaction fees, also known as interchange. This week, Visa and Mastercard, which both rely on interchange fees from merchants that accept their cards, announced another year-long delay in fee hikes originally planned for April last year. 

As a result of this pressure, Stripe has “been forced to continue trying to diversify revenue and distribution channels, but unclear how successful it has been,” Logan Allen, managing general partner & founder at Fin VC, told Insider via email. 

Here’s a look at 9 key offerings that Stripe is building out beyond payments.

Atlas

For a business just getting started, Stripe offers everything they need to incorporate, from tax ID creation to issuing stock to founders. There’s a $500 set up fee and a recurring $100 annual fee. There are also optional services, including bookkeeping and tax preparation, each for additional fees. Atlas was launched in beta in 2016.

As far as competition, Atlas’ offerings are similar to players like Clerky, Gust, and LegalZoom.

Billing

Billing supports multiple subscription models, including tiered pricing and volume-based pricing.

The billing feature is often used by customers like Atlassian, for example, which uses both billing and payment processing powered by Stripe.

Stripe’s billing platform works within Stripe’s payments application programming interface (API), meaning billing customers can accept multiple forms of payment. Fintechs like Recurly and Chargebee offer billing for subscription businesses, too. 

Capital

Stripe Capital, launched in 2019, is the lending side of its business. Unlike traditional business lenders, Stripe doesn’t check founders’ credit scores, instead lending solely based on a company’s history with Stripe, which includes real-time sales data. 

Repayments are automatically collected as a percentage of a businesses’ sales with Stripe, meaning business pay down more when sales are up, and less when sales are down.

Linking sales with lending isn’t unique to Stripe. PayPal and Square have similar products for the businesses operating on their systems.

Connect

Stripe Connect is a payments offering designed for other marketplaces like social media companies, ride-sharing

services, and e-commerce players. With its infrastructure, clients with multiple buyers and sellers can onboard new sellers and manage payments in and out through one system. Connect, first rolled out in 2012, also helps these marketplaces navigate the complex payments regulations in different countries.

Connect customers include Facebook, GitHub, Lyft, and Shopify. Stripe charges its Connect customers 2.9% plus $0.30 for every successful card transaction processed on behalf of those kinds of companies on its network.

This kind of offering, referred to as a payment gateway, is also available from players like Adyen, Payoneer, and PayPal. 

Corporate card

Beyond small business loans, Stripe offers corporate cards to its customers, as of 2019. Credit limits are determined by sales and banking history, meaning they can rise as the business grows. It also offers spend management tools and has integrations with accounting software like Expensify and Quickbooks.

Corporate cards have historically been dominated by legacy players like American Express, but upstarts including Brex and Ramp have grown quickly.

Issuing

Stripe Issuing, a self-service card-issuing API, launched out of beta in April 2020. It enables merchants to issue physical and digital cards, a feature embraced by the buy now, pay later and on-demand delivery industries. 

QuadPay, for example, uses Stripe Issuing when its customers want to use its installment payments in-store. Via the QuadPay app, customers can request to make a purchase and are then issued a temporary digital card to use at check-out. 

Stripe charges $0.10 for every virtual card issued, and $3 for every physical card. There’s also bespoke pricing for customized cards. 

For issuing, which launched in 2018, Stripe is competing with the likes of $4.3 billion Marqeta (currently gearing up for an IPO), as well as Adyen, which also has its own issuing offering.

Terminal

Stripe Terminal, launched in 2018, is the hardware side of Stripe’s payment business, enabling its merchants to accept payments in-person. Stripe offers two options, a BBPOS chip reader that can be linked to a smartphone, and a larger Verifone card reader. 

For in-person payments, Stripe charges 2.7% plus an additional $0.05 for each successful transaction, a bit lower than its online rates of 2.9% plus $0.30.

Customers like MindBody use Stripe hardware for in-person payments in addition to online.

In hardware, Stripe is competing with other fintechs that have primarily catered to brick-and-mortar merchants, including Clover, Square, and Toast.

Treasury

Stripe Treasury, its banking-as-a-service platform, launched in December 2020. It’s primarily geared toward Stripe’s marketplace clients like Shopify. Treasury powers Shopify’s own business-banking offering, Shopify Balance, which allows merchants to move and store money within the Shopify ecosystem.

As part of this launch in December, Stripe announced that it added Goldman Sachs and Evolve Bank & Trust as additional banking partners.

With Treasury, Stripe is going up against the broader partner banking industry, which is filled with banks that power non-back fintechs, including Bancorp, Green Dot, and Radius. For the banks, it’s an additional source of revenue. For fintechs, it enables them to move money and take deposits without getting a bank charter, leaning on the banks’ own charters.

Venture Investing

Stripe’s venture arm, which invests mostly in fintech, has been fairly active as of late. In 2020, it made eight investments in fintechs including Fast, Monzo, and Step, according to Crunchbase.  

And it’s off to a big start in 2021, with seven investments already. Many of Stripe’s investments are early-stage bets in seed, Series A, and Series B rounds. It started making venture investments in 2014, according to Crunchbase.

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