By staff reporter
IF you haven’t heard of the Collison Brothers, that could be about to change.
Limerick siblings Patrick (25) and John (23) Collison are co-founders of the online payment company STRIPE, which has just announced it raised $80m from venture capital investors in a deal that values it at $1.75bn. That brings the total to $120 million raised by the company since it debuted in 2010.
Based in San Francisco with a staff of 84, STRIPE, is now one of very few start-ups valued at over a billion dollars, a mere three years after the Limerick brothers established it. As such, it is now the only serious competitor to e-payment company PayPal Inc. Indeed, last September, PayPal made a bid to buy Stripe, but the offer was refused.
Patrick, its CEO and Ireland’s Young Scientist of the Year in 2005, said the valuation was a reaction to the promise his company has shown, processing millions of dollars in payments in the past twelve months for various business, including the Museum of Modern Art in New York.
He said: “It’s a nice validation of what everyone has gotten done over the last year,” Collison, who dropped out of the Massachusetts Institute of Technology in 2009 to found Stripe, said of the recent investment.”
Some of the company’s investors include the founders of PayPal, Elon Musk and Peter Thiel, as well as venture capitalist firms Sequoia Capital, and Khosla Ventures.
With its goal to expand business online into more territorities, demand for the brothers’ company can only grow in the coming years given that currently only 2 per cent of all commercial transactions take place online. And with talk of a potential deal with Twitter also on the cards, there’s still plenty of scope for the Limerick pair’s company.
Stripe was not the Collison brothers’ first foray into business. Their first startup, Shuppa was founded in 2007, and offered an auction and marketplace management system for individual sellers on market sites like eBay and Amazon.
In March 2008, the brothers sold it to Canadian firm Live Current Media for $5 million (€3.2 million) – making the brothers millionaires while they were still teenagers (John was 17 and Patrick 19).
HOW EXACTLY DOES STRIPE WORK?
THE company says its aim is to allow developers to build their own payment forms on site, and allow visitors to stay on the site when they go through the checkout process.
It supports multiple programming languages, meaning it can be setup within minutes, and its funciontality has made it very popular both with developers and startups who have lots of transactions to make.
Stripe’s services are available in America, Canada, UK and Ireland and is being road-tested for Australia, Belgium, Germany, Finland, France, Luxembourg, Netherlands, and Spain.
The company generates revenue by collecting 2.9 per cent of most transactions in addition to a flat commission of 30 cents per charge – similar to PayPal.
Like PayPal, it makes a percentage of every transaction made (Stripe collects 2.9 per cent plus 30 cents each time).