The U.S. online payments start-up Stripe is planning to extend its operations on the North European markets. Stripe's co-founders, brothers Patrick and John Collison, announced to the public their plans to start operations this week in Scandinavian countries like Finland, Sweden, Norway, and Denmark. Stripe, valued at $5 billion or £3.2 billion, will compete on the market with some of most valuable fintech European companies.
Stripe's online payment technology makes it easier for online businesses to accept money over the net. At first, the San Francisco based U.S. company was just catering to developers. But its secure online payment system helped to a quick rising in popularity and soon after Stripe became the preferred online payment system of American online businesses.
Recently, the company has started to collaborate with leading tech companies like Pinterest, Twitter, and Apple particularly in developing technologies for mobile payment.
At a MoneyConf in Belfast, on Monday, June 15, John Collison, the co-founder of Stripe, stated that the company is launching its operations in Scandinavian Europe this week. Collison declared during his interview that one of the reasons they launched the company was the fact that the common barriers of starting an online business today are mostly inexistent. And it is really easy to go from a product to a business in a very short time.
The extension of Stripe's operations on the North Europe markets is a direct threat to Klarna, a Swedish online payment company, one of its strongest competitors in the region. The Swedish company is valued at just $1 billion or £650 million. Along with TransferWise, Klarna is one of the most successful European fintech start-ups.
Klarna, the Swedish competitor, allows the retailers to use "buy with one click" buttons on their websites. The company handles online payments on behalf of retailers, same as its American counterpart, Stripe. Last year, Klarna gained an impressive 30 percent of the market of all online purchases in Sweden and globally processed $9 billion (£5.81 billion) worth of payments.
Sequoia Capital, a well-known investor from Silicon Valley, has specific shares in both Stripe and Klarna. Max Levchin, Peter Thiel, and Elon Musk, PayPal co-founders, are also investors in Stripe. The company is currently trying to raise more cash in order to support its planned extension on new regional markets.
During the interview on Monday, June 15, Collison played down Stripe's $5 billion (£3.2 billion) valuation, by declaring that while valuation represents just the cost of capital, there are many other business metrics more important than that, since today's tech start-ups are not capital intensive. He also stated that internally, the company focuses on metrics such as revenue, profits, number of customers, and how happy their customers are.
