London-based payments processing provider Checkout.com is now one of the most valuable startups in the financial technology market after raising a new $1 billion funding round.

Checkout.com, officially Checkout Ltd., announced the funding this morning. Including its latest $1 billion funding round, Checkout.com has raised $1.8 billion since launch.

The startup said the primary investors in this round included Altimeter, Dragoneer, Franklin Templeton, GIC, Insight Partners, the Qatar Investment Authority, Tiger Global, the Oxford Endowment Fund and an unnamed large West Coast mutual fund management firm. A number of returning backers contributed as well.

The investment values Checkout.com at $40 billion. The new valuation is notable not only because it makes Checkout.com one of the fintech segment’s most valuable startups, but also because the startup was worth less than $20 billion only last year. Since 2019, the startup’s valuation has increased by a factor of about 20.

Checkout.com provides a platform that enables e-commerce companies to accept payments from customers. The platform is also used by cryptocurrency firms for tasks such as processing digital asset transactions. Checkout.com says that its customers include big names such as Sony Corp., Netflix Inc., Coinbase Global Inc. and Klarna Bank AB, a fellow fintech startup that was valued at $45.6 billion earlier this year.

“At our core, we help enterprise merchants to navigate the complexity of moving money around the world, whether in fiat currency or bridging the gap to Web3,” said Checkout.com founder and Chief Executive Officer Guillaume Pousaz.

Besides tools for processing purchases, Checkout.com also offers a variety of complementary features. The startup’s platform includes support for 150 currencies, fraud detection capabilities and analytics dashboards that a company can consult to find ways of streamlining its payment processes.

A core selling point of Checkout.com’s platform is that it’s provided through a unified application programming interface. Usually, processing an e-commerce purchase requires using several different fintech services, each of each has its own API.

Checkout.com’s unified API allows developers to more easily integrate the software into their applications because there are fewer moving parts to manage. From there, code maintenance is simpler as well for the same reason. The result is that companies can launch new fintech services faster.

Checkout.com’s approach is winning over a growing number of online retailers. According to the startup, the number of transactions processed by its platform has tripled in the past year. Checkout.com’s rapid growth is especially notable because the startup has managed to expand its market presence quickly while operating at a profit for the last few years. 

To maintain its revenue momentum, Checkout.com will use its latest $1 billion funding round to launch a major market expansion initiative in the U.S. The startup expects to double its workforce in North America over the next year.

On the technology side, Checkout.com is preparing to launch a new solution designed for processing purchases made on e-commerce marketplaces. The startup also intends to develop more features for processing cryptocurrency transactions.

“As a product-first company with almost half our total headcount dedicated to technology roles, we’ll continue to drive this cadence of innovation,” said Checkout.com Chief Technology Officer Ott Kaukver. “It unlocks additional opportunities across the entire payments value chain, which in turn helps us meet the needs of our merchants around the world.”

Stripe Inc., another major privately held player in the payments processing segment, last year closed a $600 million funding round at a hefty $95 billion valuation. Checkout.com Inc.’s push to expand its market presence in the U.S. could mean more competition for Stripe, particularly given the startup now has an additional $1 billion to spend on growth initiatives.

Stripe has more than a million customers that range from small businesses to major online retailers. Checkout.com, in turn, mainly mainly sells its platform to enterprises, which is the market segment where it can be expected to most directly compete with Stripe.

The growth of both Checkout.com and Stripe is likely driven partly by the increasing popularity of e-commerce. Publicly traded Shopify Inc., whose software powers the operations of numerous online retailers, reported in October that the total value of the merchandise sold through its platform reached $41.8 billion during the quarter ended Sept. 30. That represents a year-over-year increase of 35%. 

Image: Checkout.com