Stripe valuation highlights pandemic-fuelled surge in ecommerce

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Latest news

• Concerns have been voiced over financial services workers locked in homes or sent to quarantine camps in Hong Kong

• US airline Delta said it would lose $3bn in the first quarter but bookings were bouncing back

• A Bank of America survey highlighted inflationary pressures as global companies end discounts or raise prices as demand increases

For up-to-the-minute coronavirus updates, visit our live blog

Stripe now most valuable private company in Silicon Valley

Today’s flurry of deals and financing news highlights how the pandemic has turbocharged the growing ecommerce industry.

Stripe, an online payments business, has become the most valuable private company in Silicon Valley. Founded in 2010 by two young Irish brothers, the business is now worth $95bn, a tripling in value in less than a year and higher than Facebook and Uber before they joined the stock market. Customers range from software companies such as Zoom to services such as Shopify and social media platforms such as Instagram.

The boom in online business has also lifted rivals such as Europe’s Adyen while London-based start-up Checkout.com has been valued at $15bn.

Meanwhile, food delivery company Deliveroo, another Stripe customer benefiting from the pandemic, today outlined its plan to raise $1bn on the London stock market — the biggest new listing of a British company for at least five years.

The surge in ecommerce is global. In Europe, Poland’s InPost, which provides lockers for shoppers picking up online purchases, today said it would buy French rival Mondial Relay for €565m. And in Japan, shares in Rakuten — a domestic online shopping business that predated the rise of Amazon — surged 24 per cent on news of a $2.2bn stake sale to companies, including Japan Post, Tencent and Walmart.

Stripe’s valuation may seem enormous but the change in consumer behaviour — accelerated by the pandemic — means there is also huge potential for growth, says the FT’s Lex column. Less than a fifth of the world’s purchases at present take place online, it says.

Global economy

US president Joe Biden has chosen Gene Sperling, an adviser in the Clinton and Obama administrations, to oversee his $1.9tn stimulus programme. Our Big Read kicks off a series on the consequences of the plan with a look at how it is giving birth to a new era of big government.

European economics commentator Martin Sandbu argues the US plan will postpone the US’s relative economic decline, unlike Europe’s response, which will hasten its marginalisation. Our Brussels Briefing newsletter discusses the financial fallout from a year of EU emergency measures, including the debate on how to spend recovery funds.

Economics editor Chris Giles and financial regulation correspondent Caroline Binham examine the record of Bank of England governor Andrew Bailey, including his response to the pandemic, after a year in the job. In a sign of the times, hand sanitiser and loungewear have been added to the basket of goods used for calculating UK inflation.

Business

The EU backlash against the Oxford/AstraZeneca vaccine continued on Monday as Germany, France and Italy all suspended its use. They joined more than half a dozen other countries who have already halted the jab, threatening further delays to the EU’s vaccination programme. The pause of the rollout is in response to reports of blood clots forming in recipients, but its developers at Oxford university said there was no problem with the jab and the World Health Organization urged nations not to pause Oxford/AstraZeneca inoculation drives over safety concerns. Meanwhile, a Dutch factory was linked to the shortfall of vaccines in the EU. Brussels is stepping up action to prevent vaccine bottlenecks and will discuss strategy at a summit on March 25 and 26.

Travel update: The chief of cruise company Carnival has said the industry will not fully recover until at least 2023. A key hurdle is getting regulators’ approval for staff to return to ships — a process that could take up to 45 days depending on restrictions and quarantine regimes. Better news comes from Virgin Atlantic, which is getting £160m in support from majority-owner Virgin Group to tide it over, while shares in Singapore Airlines jumped on news of a potential travel bubble between the city-state and Australia. Spring break demand in the US meant the weekend was the busiest for airport passenger numbers since lockdowns began in March last year. Back at ground level, the UK is planning a shake-up of England’s bus network as part of its “green recovery” plans.

Despite the vagaries of UK weather, the country’s £70bn events industry entertains millions of fans each summer. Leading event production executive Nick Morgan writes for the FT on how festivals can be made coronavirus-safe.

Markets

The second piece in our new series on the impact of Joe Biden’s $1.9tn stimulus package looks at the impact on global stock markets as investors shift from pandemic beneficiaries such as the tech sector to materials, commodities and consumer and industrial goods.

Richer countries have been able to take advantage of low borrowing costs to fund their pandemic response, but emerging markets face much higher interest rates, hampering their recovery plans, writes EM correspondent Jonathan Wheatley. Economist Megan Greene writes in the FT of the need for improved IMF support to avoid a “lost decade”.

Another beneficiary of the US recovery plan is retail investing as customers of online brokerages use their stimulus cheques — collectively valued at about $30bn by Deutsche Bank — for punts on stocks, speeding up the wave of money that has been pouring into US equities.

The essentials

The new world of hybrid work that emerged by necessity during the pandemic will need to be handled with care when “normal business” resumes, writes management editor Andrew Hill. “You have to be much more thoughtful about how you use time and place, and at the centre is a question of what helps the person be productive,” says Lynda Gratton of London Business School.

Have your say

RedsFan comments on Andrew Hill’s “Are there enough hours in the day for hybrid work?” mentioned above:

“What worries me is that if we return to the office, will our new workloads be the new norm? I’m not sure we’ll be allowed to return to the old ways of clocking off before 6:30pm and then being left alone. I just don’t see how I would be able to fit in a commute as well as working 12-hour days regularly. Already, I’m finding it difficult to fit a walk into my day and I’m not having to commute right now. Certainly, I don’t have time to cook a lamb tagine while doing my job, but then I have to think about what I’m doing.”

Final thought

This year’s Oscar contenders highlight a year in which streaming has overtaken cinemas as the principal outlet for new titles. Nominations for best film are Hollywood history movie Mank (with 10), The Father, Judas and the Black Messiah, Minari, Nomadland, Promising Young Woman, Sound of Metal and The Trial of the Chicago 7. Best actor candidates include the late Chadwick Boseman for Ma Rainey’s Black Bottom, Riz Ahmed (Sound of Metal) and Stephen Yeun (Minari). Boseman’s co-star Viola Davis is nominated for best actress in The United States vs Billie Holiday.

We would really like to hear from you. Please send your reactions or suggestions to covid@ft.com. Thanks

Source: Economy - ft.com