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BFD Expert Voices - Private Credit

BFD Expert Voices

Stripe has agreed to acquire Parafin, which helps platforms like DoorDash and Gusto offer financing to their small-business customers. 

Why it matters: Stripe is buying its way deeper into embedded finance for small-business customers.

The big picture: Stripe has been on an M&A spree in recent years to expand its product offerings.

It bought Bridge and Privy for stablecoin payments and wallets last year, and in January it closed its acquisition of Metronome for usage-based billing. 

Its pending OpenRouter deal would add AI model routing, while Parafin would expand the lending products Stripe offers through platforms.

Zoom in: Parafin powers financing programs for Amazon, Walmart, DoorDash, Gusto and TikTok Shop, and it works with platforms like Jobber and Mindbody.

It handles underwriting, funding and servicing behind the credit products those platforms offer their customers.

By the numbers: Parafin says it has funded more than $3 billion to over 60,000 SMBs across the U.S. since its founding in 2020.

More than 18,000 platforms build on Stripe, giving Parafin's credit products a much larger potential distribution channel.

Follow the money: Parafin raised $100 million in 2024 at a $750 million valuation, bringing its total equity financing raised to $194 million.

Notable Capital led that round, with Redpoint Ventures, GIC, Ribbit Capital and Thrive Capital participating.

What's next: Stripe expects the deal to close in the coming months, subject to customary conditions and regulatory clearances.

Stripe agrees to buy small-business lender Parafin

Parafin powers financing programs for Amazon and Walmart.

Illustration of the Stripe logo with a collage of abstract shapes and credit cards.

Stripe has <a class="gtmContentClick" data-vars-link-text="agreed to acquire" data-vars-click-url="https://stripe.com/newsroom/news/stripe-agrees-to-acquire-parafin" data-vars-content-id="e546c69d-8fca-40d8-a34f-1201ae046498" data-vars-headline="Stripe agrees to buy small-business lender Parafin" data-vars-event-category="story" data-vars-sub-category="story" data-vars-item="in_content_link" href="https://stripe.com/newsroom/news/stripe-agrees-to-acquire-parafin" target="_blank">agreed to acquire</a> Parafin, which helps platforms like DoorDash and Gusto offer financing to their small-business customers. Why it matters: Stripe is buying its way deeper into embedded finance for small-business customers.

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Stripe agrees to buy small-business lender Parafin

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