Stripe Inc., one of the world’s most valuable startups, said growth in payments volume slowed last year after a pandemic surge, even as it helped more large business clients handle payments over the internet.
According to the firm’s annual user letter published on April 5, volume climbed 26% to $817 billion in 2022, compared with 60% in 2021. This slowdown in growth comes after Stripe was valued at $50 billion in a fundraising round just last month.
John Collison, who along with his brother Patrick founded the company, said in an interview, “We feel like, given the climate that it was, we’re very happy. 2020 and 2021 were such fun years with ecommerce in particular. You had such a maelstrom of activity, and there was no way that would continue.”
The letter confirms parts of earlier reporting in the run-up to Stripe’s moves last month to raise $6.5 billion to cover a looming tax bill for veteran employees with expiring stock options. The $50 billion valuation it received was well below the $95 billion it was last valued at when it raised $600 million from investors in 2021.
Stripe has been targeting larger firms in recent years and now counts Amazon.com Inc. and Zoom Video Communications Inc. as customers. According to Digital Commerce 360’s Top 1000 database, Amazon is No. 1 in North American web merchants by sales, and No. 3 in the Online Marketplaces database, which ranks the 100 largest global marketplaces.
More than 100 companies now handle more than $1 billion in payments with Stripe every year and that set of customers has grown by 50% annually since 2018, Stripe said in the letter.
Collison said that large retailers have been considering how technology can boost revenue, as ecommerce players increasingly struggle with conversion rates, which measure the percentage of visitors to a website that actually make a purchase. On average, that rate hovers around 3% for most ecommerce sites, according to McKinsey.
Sources: https://www.digitalcommerce360.com/2023/04/07/stripe-volume-growth-slowed-in-2022/
