People & Money

Collison Brothers: The World’s Youngest Payments Billionaires

With a $23 billion fortune – and a net worth estimated at $11.5 billion each – the Collison brothers and co-founders of Stripe now belong in the top bracket of the world’s millennial billionaires.”

Stripe’s latest high-flying fundraising round propelled it to become the most valuable startup in America after its valuation more than doubled from a year ago to $95 billion. It also saw the fintech firm move up among the world’s most valuable payment companies although still some way off aged players in the business of digital transactions – such as credit card network Visa and e-commerce payments pioneer Paypal, both of which have market capitalisations of hundreds of billions.

Regardless of where the company belongs in the echelons of digital payments players, Stripe, founded just over a decade ago, has made out of its founders – brothers Patrick and John Collison – the youngest billionaires in the global payments processing and fintech industry, at ages 32 and 30 respectively.

With a $23 billion fortune – and a net worth estimated at $11.5 billion each – the co-founders of Stripe now belong in the top bracket of the world’s millennial billionaires and their journey to the top, like most of the record-beating billionaire entrepreneurs, has been anything but ordinary.

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Growing with cows and no internet

Rather than hot-housed by pushy parents in Silicon Valley, Seoul, Singapore, Shanghai, or any other of the world’s great tech centres, the two brothers are from the tiny Tipperary village of Dromineer in the Republic of Ireland with a population of barely 100 and “nothing but mooing cows”, as elder brother Patrick recalled. Their house in the rural village, where they spent most part of their early years, was so remote they could not even connect to the internet.

That allowed the Irish brothers enough time to read voraciously; they developed a love for computers and an interest in programming. “Instead of using the internet, I used to borrow books from the library about the internet,” Patrick once said. “I read everything I could find. It was like staring through the glass to this amazing world out there, but none of it was available.”

Aged 13 and 11, the self-confessed nerds researched, prepared, and successfully delivered a formal pitch to their parents to install a satellite internet connection so they could continue their computer programming education. Three years later, Patrick won Ireland’s Young Scientist of the Year award for creating a new programming language while younger John broke his brother’s record for top grades in the country’s school leaving exams.

“They’re extremely intelligent,” says former Bank of England governor Mark Carney who joined Stripe’s board last month. “Very level, very inquisitive about this huge range of subjects… and very funny, as well.”

In 2007, they launched their first tech startup – Shuppa – from Limerick and relocated to San Francisco after failing to secure funding in Ireland for the shopping app. They sold the startup for $5 million a year later having rebranded it to Auctomatic, making the Collisons teenage millionaires.

The Stripe chapter

The brothers have lived in the United States ever since. They got into Massachusetts Institute of Technology (Patrick) and Harvard (John) but dropped out less than a year later for a second shot at entrepreneurship. Two years after making their first millions from a tech startup, they founded Stripe, with its main focus described as a “programming language for money.”

The pitch was that developers could add payment infrastructure to their websites or apps easily and developer-friendly, with just seven lines of code. Users did not need to create an account or even know that it existed, unlike PayPal, Apple Pay, or other competitors. It also serves as a platform on which digital companies can build their entire business using its tools and paying contractors with the same system used to take payments from customers while offering anti-fraud tools, recurring subscriptions, and complex invoicing services.

Its Atlas product offers even more. For a flat $500 fee, Stripe literally sets up a company for clients, file the legal paperwork, open a U.S. bank account, and issue stock to the founders. “Stripe isn’t simply a platform, it is a platform for platforms,” analyst Ben Thompson says. “Stripe isn’t necessarily competing with other fintech [platform and service] providers but instead is seeking to be the backbone for all of them, as well as an entirely new universe of platforms that can offer their unique customers financial services that are perfectly tuned to their needs.”

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Headquartered in Dublin and San Francisco, Stripe’s goal of becoming the “backbone” of the financial internet has not only made it profitable but also seen it reach eye-watering valuations. It boasts a rich clientele that includes Google, Amazon, Uber, Spotify, Peleton, etc. and like most digital services, it has particularly been helped by the coronavirus pandemic, which accelerated the switch from physical to online payments over the past year.

As reported by Financial Times, a key competitive advantage of Stripe is “doing more with less.” The company has about 3,000 staff, a third less than Facebook had in 2012 when it went public at a similar valuation while its online tools are designed to be easy for businesses to adopt without needing a large sales force or support team. That has allowed Stripe to remain capital-efficient, even as it expanded to more than 40 countries; it has raised $2.4 billion to date, compared with Uber’s $14 billion in equity financing before its public listing in 2019.

The Collisons have just tapped investors for $600 million to fund further expansion of Stripe – a company that has grown from just being another tech startup out of Silicon Valley into a vital cog in the global digital economy. Their very own online payments empire.

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