After the market plunged by taking the hit from Covid-19, they are now ripe for public companies. Big companies such as Bumble, Roblox, and Discord have piqued investors’ interest, and there are no signs of backing out. But among all the giants, Stripe has caught the eyes of many.
What began as a small startup in Ireland that was founded by brothers Patrick Collison and John Collison in 2011, has now successfully served millions of businesses, aiding to smoothen the process of accepting and sending online payments with the usage of API software.
Although Stripe’s main competitors are not one to be taken lightly, Stripe could be the next to excel. The 11-year-old firm, valued at $95 billion by investors in March during a fundraising round, has skirted this year’s hot initial public offerings (IPO) market by using private tender offers to allow investors and employees to withdraw their holdings. This has made Stripe grow to be one of the most profitable US startups and Silicon Valley’s most prized asset.
Why Is Stripe So Alluring?
Stripe’s software enables any website or app to accept payments without additional licenses or agreements with the several banks and card companies that the company has already integrated.
Stripe’s competitive advantage is its ability to accomplish more with less. It employs around 3,000 people, a third fewer than Facebook did when it went public in 2012 at a similar valuation. Its web tools are simple to use without requiring a vast sales force or support team.
Truthfully, Stripe isn’t the cheapest option, but its attraction is based on the speed and ease with which it can be integrated, especially for small businesses and startups.
Stripe will have to fight off competition from more conservative payment companies like Worldpay, Global Payments, and Fiserv, and next-generation companies like Ayden, Paypal, Checkout.com, and a swarm of growing startups looking for a piece to bite the multi-trillion-dollar market.
What is IPO and how does it work?
An initial public offering, a.k.a. IPO, sells shares in a private company to the general public in a new stock issuance. Why do they have to go public? The main advantage of going public is that it provides easier access to capital. A company must have a track record of growth and other positive results to go public and engage an investment bank to underwrite the IPO. The underwriters also perform due diligence and double-checked the financial data and business concept. The corporation sells the stock to institutional investors once the documentation is completed. The company will set an initial price and date for the stock to begin its trading process on a stock exchange after the initial block of shares has been sold.
Stripe’s First Move Into IPO
The first obvious move made by Stripe was bringing the New York law firm Cleary Gottlieb Steen & Hamilton to represent as a legal adviser on a stock market listing for Stripe. The next phase in the process would be to hire investment banks. Because these are the beginning of a protracted process, therefore a listing in 2021 is unlikely. Stripe’s early investors include but are not limited to Elon Musk, Peter Thiel, and any current shareholders will be rewarded handsomely once the company goes public. However, there have yet to be any updates regarding the IPO.
Stripe has kept vital statistics on its revenue and profitability under wraps for more than a decade because it is still a private company. Stripe processes hundreds of billions of dollars in transactions annually through a vast client list, including Google parent company Amazon, Alphabet, Zoom, and Uber. With such success in acceleration, Stripe’s rapid expansion could potentially challenge Chinese technology titans with values approaching $200 billion, Ant Group (688688.SS) and ByteDance for the title of world’s most valuable company by the time it goes public.
How to purchase Stripe IPO
You can utilize an IPO investing app such as Freedom Finance, TD Ameritrade, or Fidelity to participate in the Stripe IPO. Customers can use their existing brokerage account to access IPOs and secondary offers. When Stripe goes public, you can also acquire shares using commission-free trading software like eToro or Webul.