Stripe is taking long strides to offer its services to Indian merchants. So, what do we know about this startup?
Stripe made two notable announcements on Sunday.
- The startup raised $600 million at a valuation of $95 billion which makes it the most valuable startup in the U.S. According to CBInsights data, Stripe’s valuation overtook the valuation of SpaceX and Instacart Inc.
- Next, the company said that it will soon be available to millions and more businesses in Brazil, India, Indonesia, Thailand and the UAE.
Before we understand why this is important news, we need to understand some basic things.
Firstly, What Is Stripe?
Founded in 2010 by two Irish siblings — Patrick Collison and John Collison, Stripe provides payments processing services for businesses individuals. The firm’s software competes with Square Inc. and Paypal Holdings Inc., Stripe has been one of the hottest fintech companies in the world, with customers including Amazon, Salesforce, Lyft, Instagram, Uber, Zoom.
The growth of Stripe amazes everyone and the pandemic played a big role in it. According to the U.S. Census Bureau, online sales climbed an average of 15% annually between 2010 and the beginning of 2020. Then, in the three months through June, they climbed 45% from a year earlier due to the lockdown.
We can see how this has helped Stripe if we take a look at the company’s valuation. Earlier in April 2020, Stripe was valued at $36 billion but now, its valuation has gone up nearly threefold to $95 billion. At present, Stripe’s valuation is higher than the valuation of Facebook and Uber before they went public. Also, according to FT, Stripe has seen more than 200,000 new companies in Europe signing up to the platform since the beginning of the pandemic.
Entry To India
This is not the first time Stripe has mentioned entering the Indian market. In 2016, the company had established its first base in India by hiring former Amazon India executive Anand Balaji as its country head. Later in 2017, the company launched an “invite-only beta for Stripe in India with a small group of companies”.
Until now, the company hasn’t made any notable progress in the country’s payments ecosystem. However, the company might be having bigger plans for India now as it is currently hiring for various engineering roles in India, according to the recruitment page on its website.
We understand why India’s fintech industry might seem very attractive for companies. According to a study by Boston Consulting Group and FICCI, the valuation of India’s fintech sector is expected to hit $150–160 billion by 2025. This number translates to an incremental value-creation potential of approximately $100 billion. Also, the country’s fintech industry didn’t get affected by the pandemic as it continued to see growth during the tough times. So, India is a lucrative market for Stripe.
However, will Stripe be able to make a mark in India as the country has several players already who are fighting for the market share? Also, will Indians accept Stripe as their go-to option for payments as they have so many choices when it comes to payment apps? If only we could see the future now…