The Payments Unicorn List Drops by One—But Investor Cash Is Far From Drying up

By John Stewart

It is a commonplace notion that unicorns are to be encountered only in myth. But in the world of venture capital, they are becoming increasingly numerous. While it was once considered extremely rare for a privately held startup to achieve a $1 billion-plus valuation, there are now 123 companies that have met or exceeded this threshold, compared to 102 less than three months ago. That’s according to CB Insights, an investment-research firm that tracks these so-called unicorns in real time.

Of these, seven are payments companies, down by one only because e-commerce payments platform Shopify Inc. went public in May at a valuation of $1.27 billion. That’s up from the $1 billion price tag it had carried as a private entity.

An even more remarkable surge is that of Stripe, a startup whose relatively uncomplicated code lets Web sites rapidly set up to accept card payments. Recent equity infusions from Visa Inc. and American Express Co. boosted Stripe’s valuation to fully $5 billion, up from the $3.5 billion price tag it carried just 12 weeks ago.

Another interesting case is Square Inc., the ambitious mobile point-of-sale provider that practically invented smart-phone card acceptance and has since made runs at digital wallets, business lending, and peer-to-peer transfers. Currently valued at $6 billion as a privately held company, Square appears to be preparing to exit the unicorn list. News emerged a week ago that the 6-year-old company may have filed for a confidential public offering. Its chief executive and co-founder, Jack Dorsey, may also be feeling a bit distracted these days as he struggles to re-energize Twitter, another company he helped start.

At the rate payments startups are attracting investors, it won’t be long before more of them breach the $1 billion threshold.

But for now, here are the other five payments unicorns, with their current valuations (as of Friday afternoon):

· Powa Technologies (mobile point of sale), $2.7 billion

· Prosper Funding LLC (online lending), $1.9 billion

· Adyen (cross-border payments gateway), $1.5 billion

· TransferWise Ltd. (multicurrency money transfer), $1 billion

· Klarna (e-commerce payments platform), $1 billion

These five valuations remain unchanged over the past 12 weeks.