Stripe’s investments in machine learning (ML) and artificial intelligence (AI) contributed to the financial infrastructure platform’s rapid growth in 2024, co-founders Patrick Collison and John Collison wrote in their annual letter to the Stripe community that was released Thursday (Feb. 27).
“These bets continue to pay off, increasing revenue for existing customers, encouraging more businesses to switch to Stripe, and helping new companies reach significant scale unprecedentedly quickly,” they wrote.
Stripe’s total payment volume rose 38% in 2024 to reach $1.4 trillion, according to the letter.
In a separate announcement, the company said Thursday that a tender offer designed to provide liquidity to current and former Stripe employees was made at a valuation of $91.5 billion. The company will repurchase shares alongside investors.
Stripe was valued at $65 billion after a share sale deal in February 2024, Bloomberg News reported at the time.
The AI boom driving growth at Stripe includes demand for Stripe Billing’s ability to manage active subscriptions and serve as the “revenue engine of the AI era,” partnerships with AI companies that are reaching annualized revenue milestones more quickly than software-as-a-service (SaaS) companies, and AI agents that are using the company’s solutions for optimized checkout and spending money with virtual cards.
“Overall, we are ensuring that Stripe is well-positioned to serve the next chapter of the economy,” Patrick and John Collison wrote in the letter.
Looking at another trend in the payments landscape, they wrote that the proliferation of vertical SaaS solutions has enabled small businesses to better compete with franchisees and has boosted demand for Stripe to power the platforms’ payment services.
“This in turn highlights why internet-native, programmable financial services are so important: they’re the foundation that vertical SaaS platforms need to flourish,” Patrick and John Collison wrote.
Another trend in the industry is “industrialized fraud” that is led by teams of engineers, managers and data analysts and costs the typical online business 3% of their revenue.
Stripe combats this fraud with its reputation network that is informed by data from the company’s transaction data that includes credit cards, email addresses, IP addresses, phone numbers, shipping addresses, devices and other details. With this data, Stripe’s systems can detect suspicious behavior.
“Data from $1.4 trillion in annual payments volume means that each payment makes the next payment safer, a flywheel spinning with now-considerable momentum,” the Collisons wrote.
The letter also highlighted stablecoins, saying that Stripe is helping enterprises assemble their stablecoin strategies and that the company is seeing stablecoins used to manage corporate treasuries, send remittances, facilitate dependable savings in countries with unstable currencies, and enable payments from companies with low card penetration.
“Stablecoins have four important properties relative to the status quo,” Patrick and John Collison wrote. “They make money movement cheaper, they make money movement faster, they are decentralized and open-access (and thus globally available from day one), and they are programmable.”
Stripe continues to invest in research and development as it expects AI, stablecoins and other forces will “reshape the landscape,” according to the letter.
Its solutions are helping established businesses modernize their operations or reinvent their business models, the letter said. Businesses are adopting these solutions to make more money by optimizing every part of the transaction and to keep up with the evolving payments landscape.
“Businesses need to adapt to the proliferation of new payment methods and business models, the growing sophistication of fraudulent actors, the ever more exacting expectations of consumers, and the transformation in the commerce experience instigated by AI,” Patrick and John Collison wrote.
