[News Inside] Even Musk Invested... The Eccentric Brothers Who Became Billionaires in Their 20s

Stripe Founders John Collison and Patrick Collison Brothers

▲Patrick Collison (right) and John Collison (left)

[Asia Economy Reporter Kwon Jaehee] A startup invested in with personal funds by Elon Musk, CEO of Tesla, who competes for the title of the world's richest person.

It is the payment platform 'Stripe,' used by 8 to 9 out of 10 Americans. Recognized as the most valuable startup in Silicon Valley, Stripe recently secured $600 million in investments from the Irish Financial Management Authority, Allianz Insurance, Fidelity Securities, AXA Insurance, and private equity firm Sequoia Capital, valuing the company at a total of $95 billion (approximately 107 trillion KRW). This is a threefold increase compared to the $36 billion valuation at the beginning of last year. It has already surpassed the valuations Facebook ($80 billion) and Uber ($72 billion) achieved just before their listings on the New York Stock Exchange. It also overtook Elon Musk's private space exploration company SpaceX, which was valued at $74 billion last month.

[Image source=Reuters Yonhap News]

Stripe is an online and mobile payment platform founded in Silicon Valley in 2010 by brothers Patrick Collison (32) and John Collison (30), who hail from a small town in Ireland. Although the service has only been around for 11 years, over 80% of Americans have reportedly used Stripe. Thanks to this, Stripe became a decacorn (a startup valued at over $10 billion) in 2017 and currently boasts the highest valuation among U.S. private startups. Globally, only China's ByteDance (approximately $180 billion) and Ant Group (approximately $108 billion) have higher valuations than Stripe among private startups.

Among the founding Collison brothers, the younger brother John Collison became the youngest self-made billionaire at age 26 in 2017, surpassing Evan Spiegel, one of the founders of Snapchat.

The brothers showed exceptional talent from a young age. They were born in Limerick, a small rural town in the mid-west of Ireland with a total population of about 100 people. Born to a father who majored in electrical engineering and a mother who studied microbiology, they showed genius in science. The eldest of the three brothers, Patrick, started computer courses at Limerick University at age 8 and learned programming at university by age 10. In 2005, at age 16, he won first place in an artificial intelligence project competition and developed a computer programming language, eventually being named Ireland's 'Young Scientist of the Year.' The following year, at age 17, he entered the Massachusetts Institute of Technology (MIT). The younger brother John also scored the highest on Ireland's university entrance exam, graduated high school at 16, and entered Harvard University.

[Image source=AP Yonhap News]

After entering MIT, Patrick created software for eBay sellers, marking his first startup. Unable to find investors in his home country Ireland, he moved to Silicon Valley to seek investment. John, who secured investment in the U.S., founded a company called Auctomatic, which was later sold to a Canadian company for $50 million, making him a millionaire at age 19.

Based on this experience, the Collison brothers joined forces to fix the complicated U.S. online payment system. The result was Stripe.

Stripe's secret to success lies in drastically simplifying the complex online payment system. Existing online payment systems like PayPal require a nine-step payment process, but Stripe reduced this to three steps. For corporate clients such as online stores, they only need to add a few lines of API provided by Stripe without developing separate servers, making it as simple as embedding a YouTube video. This simplicity made it wildly popular among e-commerce companies.

In the case of PayPal, sellers had to invest significant time and money to implement PayPal's complex system on their online stores, and consumers had to create separate PayPal accounts and navigate between the store and PayPal site for each payment, a hassle that Stripe resolved.

▲John Collison

Low cost is also cited as a factor in Stripe's success. While typical U.S. card companies, including PayPal, charge fees around 4-5%, Stripe significantly lowered this to 2.9% plus 30 cents per transaction.

As expected, Stripe quickly reclaimed the market that PayPal had dominated. It secured major clients such as Apple, Facebook, Twitter, TED, Target, Amazon, Uber, Lyft, Airbnb, Pinterest, Spotify, Kickstarter, and DoorDash, accelerating its growth.

Especially last year, Stripe benefited from the rapid expansion of the e-commerce market due to the COVID-19 pandemic. Over 200,000 new companies in Europe joined the platform after the outbreak. Founder John Collison stated, "At the beginning of last year, we processed nearly 5,000 transaction requests per second."

Elon Musk, Tesla CEO, and Michael Moritz, a legendary venture investor, have all invested personal funds, establishing Stripe as a successful startup. Peter Thiel, founder of competitor PayPal, is also known as an early investor in Stripe.

▲Elon Musk, CEO of Tesla, is also known to have invested in Stripe. [Image source=Reuters Yonhap News]

As Stripe's valuation has soared, industry speculation about an imminent initial public offering (IPO) has emerged. The recent recruitment of Divya Suryadevara, former CFO of General Motors (GM), Mike Clayville from Amazon Web Services last year, and Mark Carney, former Governor of the Bank of England, this year, supports this speculation. Typically, startups strengthen their financial teams as a precursor to an IPO. However, the Collison brothers have publicly stated they will "stick to the basics" and have not disclosed any IPO plans.

Currently providing services in over 110 countries with more than 130 currencies, Stripe plans to hire an additional 1,000 employees at its Dublin office over the next five years. It also plans to launch operations in Brazil, India, and Indonesia by the end of this year.

The brothers, who hire private tutors even on weekends to study law and physics and enjoy reading and flying light aircraft as hobbies, have achieved much at a young age but continue their endless learning and challenges, saying, "There is no time to waste in a short life."