The most valuable private company in Silicon Valley is an outfit most people have never heard of – unless they are a) Irish or b) tech investors. It’s called Stripe, and this week the latest round of investments in it have given it a valuation of $95bn (£68.5bn). It was founded in 2010 by two smart young lads from rural Ireland – the brothers John and Patrick Collison – who were then aged 19 and 21 respectively. The latest valuation of their company – based on a recent investment of $600m from investors including Ireland’s National Treasury Management Agency, Fidelity and Sequoia Capital – means that each now has a net worth on paper in the region of $11.5bn.

The Collisons hail from Dromineer, a small town on the shores of Lough Derg in County Tipperary. When they were growing up it was too remote to have an internet connection, and initially the only way they could get decent broadband was via an expensive satellite link. In some ways they look like young prodigies from central casting. As a teenager, Patrick discovered Lisp, the programming language that was once the lingua franca of early AI programmers, and used it to create a conversational system that won him Ireland’s young scientist of the year award in 2005, at the age of 16. His brother, two years younger, got the highest scores ever recorded in the Irish school leaving certificate.

When John was 15 and Patrick 17, they launched their first startups: Auctomatic – a software-as-a-service platform for big sellers on eBay to track inventory and traffic – and an iPhone app providing an offline copy of Wikipedia (which they described as “The Hitchhiker’s Guide to the Galaxy”) on the phone. They sold Auctomatic for $5m to a Canadian company, where Patrick worked for a year (he had dropped out of MIT in the time-honoured geek fashion), while John was at Harvard.

Listening to Patrick tell the story – as he does in a terrific 2012 interview on YouTube – one is tempted to reach for a keyboard and begin writing the screenplay for a Local Hero sequel. And yet there’s a hard edge of reality to it. The two entrepreneurs were inveterate tinkerers who stumbled on a problem that bugged nearly everybody on the net at the time but which nobody had solved: the fact that while it was easy to sell stuff online, setting up a system that could securely take customers’ money was infuriatingly difficult and expensive. It involved getting a merchant account with various credit card companies, frustrating delays (the usual “five working days”) and very high transaction fees. All over the internet there were startups that had (as one founder put it) “a growing wait-list of people that wanted to give us money but couldn’t”. The Collison brothers realised, Patrick said, that “the online payments industry was an unusually compelling example of an entire industry that is going to have its lunch eaten”.

Having discovered such a tempting meal, they proceeded to feast on it. Stripe was designed to make it as easy to set up an online payment system as to tick a box on a website. Its software made it simple for any website or app to accept payments, without having to obtain its own licences or strike deals with the many different banks and card operators. In return, Stripe levies a fixed 2.9% fee. Given that, it was predictable that online businesses large and small went for it like ravening wolves – including people one wouldn’t have predicted.

Writers, for example. As traditional journalistic outlets have withered, and as even those still standing have become unable or unwilling to pay writers, new blogging platforms such as Medium and Substack have emerged with different ways of enabling writers to earn a crust. The daily version of my blog, for example, is on Substack, and it’s free to subscribers. But if, for some reason, I decided to charge a monthly fee, all I’d have to do is click on a button and Stripe would do the rest. And it turns out that many well-known writers and journalists have clicked that button in that past year or so.

It’s easy to see why. Some of them (like Andrew Sullivan, or Glenn Greenwald or Scott Alexander, to name just three) have many thousands of subscribers. Just as a thought experiment, do the numbers: an author has 2,000 subscribers willing to pay £5 a month. That’s £10,000 a month gross income. Stripe takes its 2.9% (£293) and Substack its 10% (£1,000) – which leaves £8,700 to keep the wolf from the door. All from clicking on a button.

Stripe’s current valuation may or may not turn out to be optimistic. The industry that it has disrupted may have been dozy once, but it will get its act together and the Collisons will find themselves operating in a more competitive marketplace. On the other hand, one of the few certainties in life at the moment is that online commerce is going to grow. And however large it gets, the two lads will have a slice of it. Three per cent of a big number is also a big number.

What I’ve been reading

Where to start?
“How to put out democracy’s dumpster fire” is a fine article by Anne Applebaum and Peter Pomerantsev in the Atlantic on US politics and online media in the Biden era.

Posting propaganda
NYU researchers have written a nice empirical investigation on how far-right news sources are better at getting Facebook users worked up.

Webcam woes
What comes after “Zoom fatigue”? More Zoom, Adam Clark Estes thinks in his piece on Recode. Sigh.