Shopify has reportedly invested in San Francisco-based FinTech startup Stripe, which processes payments for e-commerce businesses.
According to The Wall Street Journal, Shopify, Capital Group, Sequoia Capital, Silver Lake, and others invested about $1 billion USD in Stripe, after the FinTech firm recently gave investors the opportunity to acquire significant stakes in the company from existing shareholders, including current and former Stripe employees. The Journal reports these bids exceeded $4 billion, but only $1 billion were filled through the tender offer, which closed last month.
The reported investment comes as the Canadian retail tech firm has ramped up its strategic investment efforts.
For Shopify, which has previously partnered with Stripe, the reported investment comes as the Canadian retail tech firm has ramped up its strategic investment efforts. Earlier this year, Shopify put capital into Vancouver-based FinTech startup Bench and Toronto same-day delivery firm Swyft.
In December, Shopify partnered with Stripe and Evolve Bancorp to power two products within its Shopify Balance small business banking offering, which it first unveiled in May 2020. According to The Journal, to date, Shopify has invested over $350 million in Stripe. In May, The Globe and Mail reported that in Q1, Shopify invested $200 million in an unidentified “private company that is a partner in its ecosystem.” Sean Silcoff of The Globe wrote on Twitter that “according to the WSJ, that co is Stripe – and the amount is even higher.”
This isn’t the first time Shopify has invested in a key partner: Shopify has also backed San Francisco-based ‘buy now-pay later’ (BNPL) retail FinTech company Affirm, which it partners with to offer installment financing capabilities to Shopify merchants. Affirm went public earlier this year in a $1.2 billion initial public offering (IPO), giving Shopify a nearly $2 billion windfall.
In March, Stripe, which describes itself as “payments infrastructure for the internet,” became the most valuable private company in Silicon Valley, raising $600 million at a valuation of $95 billion. The Journal reported Stripe is considering going public later this year or early next year.
According to The Journal, Shopify is one of Stripe’s largest payment processing customers.
Shopify also recently acquired the team behind Primer, an Oakland-based augmented reality home design app. Terms of the deal, which was announced in a blog post from Primer, were not disclosed. Primer’s app and service will shut down on July 10 as part of the deal, and its team is set to join Shopify.
“We founded Primer with a singular conviction: the future of commerce is immersive,” wrote Primer co-founders Adam Debreczeni and Russ Maschmeyer. “Along the way, we’ve admired Shopify’s progress in democratizing commerce and making world-class shopping experiences possible for so many brands.”
“We’re excited to have the opportunity to realize our founding conviction of building immersive shopping experiences on a massive scale at Shopify,” wrote Debreczeni and Maschmeyer.
Photo courtesy of Shopify