The $70 Billion Fintech Stripe: A Decade of Strategic Fintech Acquisitions
Stripe’s 2024 acquisitions (three in total) got me thinking about Stripe’s acquisition strategy and how it has evolved since 2013.
Stripe`s Summer acquisition of Lemon Squeezy, piqued my curiosity, making me wonder where it fits into Stripe’s offerings. This acquisition is particularly intriguing as Stripe recently shifted from an all-in-one approach to an à la carte model, a strategic unbundling aimed at expanding its customer base and empowering its developer-first approach further.
Stripe was founded in 2010, and its first acquisitions naturally were focused on enhancing internal capabilities. Over time Stripe’s approach has shifted towards strategic acquisitions that expand its global reach, bolster its technological offerings, and strengthen its position in the Fintech market.
From its first acquisition of Kickoff in 2013 to recent purchases like Octoane, Lemon Squeezy, and Bridge in 2024, Stripe has consistently targeted early-stage companies with innovative technologies, particularly those enhancing Developer tools and expanding into Emerging markets.
Stripe’s first acquisition was Kickoff, a chat and task-management app for teams. This acquisition was more about enhancing internal team collaboration rather than expanding product offerings or market reach.
Over the following 5 years (2014–2019) Stripe focused on expanding its core payment processing capabilities and entering new markets, such as launching in Australia and Singapore. There were fewer high-profile acquisitions, indicating a period of organic growth and market penetration.
Stripe’s 2020–2024 Acquisitions
Crucnhbase reports that Stripe has made 16 acquisitions in total. Eleven of them were in the last 4 years. The 2020s started with its largest acquisition of African payment provider Paystack.
In October 2020, Stripe acquired Paystack a Nigerian payment service provider, for $200 million! At the time of acquisition, Paystack was processing over 50% of online transactions in Nigeria. This was a major geographical expansion in a continent that had huge potential.
Stripe Acquisitions 2021 — A buying spree
2021 was a busy year for Stripe’s acquisition strategy, with the company making four significant purchases to expand its capabilities.
- TaxJar (April 2021): Cloud-based tax services
• Bouncer (May 2021): Credit card fraud detection technology
• Recko (October 2021): Indian-based payments reconciliation software
• OpenChannel (December 2021): Platform for building and managing app ecosystems
Recko has been integrated with Stripe`s “Revenue Recognition,” “Billing,” and “Invoicing” services. OpenChannel has been integrated to Stripe`s “App Marketplace” and “Ecosystem Integrations”.
Stripe Acquisitions 2022 — Going phygital
In January 2022, Stripe acquired BBPOS, a company specializing in the design and manufacture of end-to-end mobile POS solutions. This acquisition allowed Stripe to bring the hardware development of Terminal readers in-house, enhancing its capabilities in the point-of-sale sector.
The move demonstrated Stripe’s commitment to expanding its physical payment infrastructure alongside its digital offerings.
Stripe Acquisitions 2023–2024
In 2023, Stripe continued its strategic acquisitions with the purchase of Okay, a low-code analytics software for tracking engineering teams’ performance, in May.
The company also completed an “acqui-hire” of Supaglue’s four-person team in March, integrating their expertise in open-source developer platforms for user-facing integrations.
This year, Stripe acquired Octane, a next-generation revenue platform for software businesses, in January 2024.
In July, Stripe acquired Lemon Squeezy, a payment processing startup specializing as a merchant of record for digital products, further expanding its capabilities in global sales tax handling and legal processing.
In October Stripe acquired Bridge, which is not even 2 years old. Bridge is developing infrastructure to move money faster. With APIs for cross-border payments via stablecoins this acquisition is a major confidence vote for stablecoins.
Acquisitions by Funding Stage
The funding stages of acquired companies provide insight into Stripe’s strategic approach.
Paystack and Bridge had completed a Series A round before the acquisition. Octane and Recko were also Series A companies at the time of acquisition.
TaxJar, bought in April 2021, had reached Series B funding and is clearly the exception.
Most companies Stripe has acquired were seed stage. From Lemon Squeezy, Okay, Open Channel, to Bouncer.
By acquiring firms at these early funding stages, Stripe can potentially integrate innovative technologies and talented teams at a lower cost compared to more established companies.
Acquisitions by Employee Size
Grouping acquisitions by employee size reveals Stripe’s approach:
• Small Teams (1–50 employees): Bouncer, Okay, Supaglue, Bridge
• Medium Teams (51–200 employees): Recko and OpenChannel
• Larger Teams: Paystack
This strategy allows Stripe to integrate specialized technologies from nimble startups while also acquiring established teams with significant market presence.
The acquisition of Paystack is an outlier. Paystack, had a larger team and strong foothold in Nigeria. Paystack is functioning independently from Stripe, maintaining its brand and strategic direction. This independence was part of the acquisition agreement, allowing Paystack to leverage Stripe’s resources while continuing to execute its vision and expand its footprint across Africa
Meanwhile, smaller acquisitions like Bouncer and Okay bring in focused expertise in areas such as fraud detection and engineering analytics, enhancing Stripe’s technological capabilities.
Conclusion
Stripe`s acquisitions will continue as its cash flow projections are positive. Stripe seems to continue its pre-IPO strategic buying spree to enhance its technological capabilities and strengthen its penetration in existing markets, to expand geographically, to grow by adding complementary services, and also to acquire talent to drive continuous innovation.
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