Payments Startup Stripe Valued at $9 Billion in New Funding

Stripe raised new financing that values the startup at about $9 billion, cementing its status as a major player in the crowded digital payments space and heralding a possible initial public offering, according to Bloomberg. CapitalG, the late-stage investment arm of Alphabet, and venture capital firm General Catalyst Partners led the $150 million round, with participation from existing investors including Sequoia Capital. The San Francisco-based startup was previously valued at $5 billion and has raised more than $450 million to date.

Stripe’s soaring value is a bright spot in a startup sector that has seen mostly stagnant or falling valuations this year. India’s top ride-hailing service Ola is seeking new funding at a 40 percent lower valuation. The Bloomberg U.S. Startups Barometer, which measures things like capital raised, deal count and number of exits, has fallen 8.9 percent in the past year. Stripe shows that some startups capable of making money can still attract richer rounds.

Stripe began by making mobile payments tools for developers. At first, the six-year-old company attracted small tech companies in the U.S. It has since become a competitor to digital payments giant PayPal, winning over larger enterprises including Facebook, Target and Macy’s Stripe is now worth twice as much as Square, a mobile payments firm that went public a year ago. Stripe has users in 110 countries and in recent months it started in Asia. Money from the new round will be used for faster international growth, possible acquisitions, more developer tools and new software to help businesses in different ways, Stripe said.

With this investment, Alphabet now has stakes in three large tech startups that may go public soon. Earlier this month, its CapitalG unit disclosed an investment in Snap, operator of the Snapchat messaging service. Alphabet also has a stake in car hailing giant Uber. Stripe provides software that lets businesses easily accept payments online, from credit cards to bitcoin, Android Pay and Apple Pay. It also provides tools to help with data security, fraud prevention, accounting and billing. The Wall Street Journal earlier reported the fundraising.