€33bn in, how far can Stripe go?
IF STRIPE’S updated ‘post-money’ valuation of €33bn is accurate, it is the biggest, or most valuable, company created by an Irish person in the last 50 years. In a sense, the timing for Patrick and John Collison’s latest $600m (€552m) funding round could not be better.
The online payment firm, based in San Francisco but with a 320-strong Dublin office, is one of just a handful of big companies whose stock — literally and figuratively — has jumped because of the pandemic lockdown.
It’s not just that we’re all suddenly having to use online channels more to buy or pay for things. It’s that we’ll likely still be doing at least some of it this way when the pandemic eases off.
Think about this: now that you’re getting used to buying bits and pieces online, will you automatically drop that behaviour once you can go to a physical shop again? Other than groceries and clothes, are all of the shops you used to physically attend guaranteed to see you back as frequently as before?
It’s doubtful. Retail has slowly been going one way for the last decade, a point acknowledged by Retail Ireland, which says the retail landscape will be far more online-orientated when the medical emergency calms down.
But it’s not only Amazon or Boohoo who benefit. Stripe is now one of the world’s critical payment infrastructure firms. Giants like Uber and Spotify use it. The more we pay for things online, the bigger its universe becomes.
Stripe isn’t the Zoom of online payments — it’s not trouncing rivals in the way that Zoom has raced ahead of Skype or Hangouts. PayPal remains a huge player. There’s also Jack Dorsey’s Square and Adyen (which has big players like Netflix and Facebook as clients), and others.
But some of these either had an early mover advantage (PayPal) or very high-profile founders (Square).
Stripe’s strength has been a more technical one. It has arguably made its services into the cleanest, most effective way for retailers and service providers to let their customers pay for stuff. Code is king — and the two Collison brothers have always excelled at it.
“People who never dreamt of using the internet to see the doctor or buy groceries are now doing so out of necessity,” John Collison said of his company’s immediate prospects.
“And businesses that deferred moving online or had no reason to operate online have made the leap practically overnight.”
So what will happen next for Stripe? Talk of an IPO will only grow. Its longterm backers, including firms counted as Silicon Valley’s VC royalty such as Sequoia and Andreessen Horowitz, are now close to a decade invested in the company. They are likely to favour an exit at some point in the near future.
Will Patrick (30) and John (28) spend the next decade growing the company even further? There’s no real reason they would step back immediately. Given their likely outsized personal future wealth, is philanthropy a final destination?
Patrick has become more vocal in recent times on public issues such as housing rights. Both he and John are also interested in direct interventions that might have ‘multiplier’ effects on issues, particularly in science, health and education. Both are founder supporters of the FastGrants.org initiative that awards between $10,000 and $500,000 in under 48 hours as a grant to science applications directed at helping progress Covid-19 solutions. Although it only started up this month, it has already awarded over 40 grants totalling $7m.
We might see more of this. Tech giants clear the diary
It looks like the conferencing season may already be wrapped up for the rest of 2020. Last week, Facebook announced that it is cancelling its entire events schedule until June 2021. Microsoft announced the same thing a week beforehand.
Both of these tech giants host enormous conferences, with tens of thousands of attendees. Just as importantly, they are often major clients for other conferences, like the Web Summit.
But maybe most significant is that the tech industry has been ahead of other sectors in predicting economic responses to the pandemic.
We saw this in February when they all cancelled attendance at the annual Mobile World Congress in Barcelona, the first real economic hit that Europe took.
So if you were saving dates in September or October for an event, it’s starting to look very unlikely.
Will this mean the Web Summit doesn’t happen? The company says it is keeping all options open and will follow medical and government guidance.
But given the new resolution from prominent exhibitors such as Facebook, it’s now very hard to see it occurring in Lisbon as an in-person event.
Instead, the Web Summit may try to replicate its Toronto-based Collision event, which is now happening this June as a virtual conference (called ‘Collision From Home’).
The Web Summit, with its programmers and software engineers, can set about this task. But what about hundreds of Irish organisations which planned an event this year and might be interested in holding one online?
There’s a race to build a decent platform that can do it. Dublin-based Tito e-ticketing creator Paul Campbell has a new product called Vito which aims to do the job. He has started to put it out there for companies to try.
Galway-based Ex Ordo also has a new platform called Ex Ordo Virtual, which is mainly aimed at college, research and non-profit events.
None of these companies believe that an online meet-up fully replicates a physical one. Indeed, talk to any conference attendee and they’ll tell you they’re often there for the fringe meetings. Physical presence is hard to match. But given that we’ve all suddenly become used to Zoom, Teams and Hangouts video conference calls, it may only be a short step to a virtual conference as an interim measure.