Stripe’s new funding makes it a $5 billion company

Visa has made a big bet on Silicon Valley payments upstart Stripe.

Tomorrow, the financial services giant will announce that it has made an investment in Stripe.

Founded by brothers Patrick and John Collison, Stripe helps businesses accept nearly all forms of digital payments online. Its service has gained considerable traction and helped push the company into the top tier of startups known as unicorns that are valued at $1 billion or more.

With the latest funding with Visa (V), Stripe is valued at $5 billion, up from $3.5 billion just seven months earlier, according to Collison. The amount of investment, which will be used to expand internationally and for hiring, was undisclosed.

Stripe has taken in over $300 million in funding from Sequoia Capital, AmEx, and General Catalyst among others. Both Sequoia and American Express added to their investments in the latest round while Kleiner Perkins put in money for the first time.

“I think the valuation jumped because of the surprising momentum of the business,” explained Patrick Collison, who is the CEO of the company. “Right now, we are ahead of our 2015 projections of revenue, and transaction volume from merchants.”

Increasingly, Stripe has partnered with large companies to help process their payments. In early July, Stripe announced a deal with American Express to let merchants accept payments on their sites through the credit card company’s new PayPal (PYPL) rival. Last year, Stripe inked a deal with Ant Financial’s Alipay, China’s largest digital wallet, so that online retailers can accept payments from shoppers in China.

Additionally, Apple (AAPL) listed Stripe as a preferred partner on its payments service, Apple Pay. Stripe also powers payments made through Buy buttons for Pinterest, Facebook and Twitter.

“Partly through design and partly through circumstance, Stripe has a spectacular market opportunity at its doorstep,” Moritz said in an interview with Fortune. “Stripe is at the triple intersection of mobile payments, cross border commerce, outsourcing payments for medium and large companies.”

The next frontier for Stripe is more international expansion, and part of the Visa deal will be helping Stripe process payments in countries outside the U.S. Currently Stripe is available in 20 countries, but will be expanding more deeply in Asia in the coming months.

Collison says that the two companies will also work on improving credit card security online and making it easier for shoppers to use credit cards when online.

Jim McCarthy, Visa’s executive vice president of strategic partnerships and innovation, explains that the Stripe partnership is similar in many ways to the investment Visa made in payments company Square in 2011. For Visa, Stripe’s popularity with developers and ease of use was particularly interesting, he added.

As it looks to justify its valuation, Stripe will be evaluated in part by the large merchants it can convince to use its technology to process payments. Kickstarter, Shopify and Lyft all currently use Stripe, but the company has yet to woo a brick and mortar retailing giant like Walmart.

Currently, one of Stripe’s largest competitors is PayPal, whose Braintree arm processes payments for companies like Uber and food delivery startup Munchery. Last year, Braintree processed $22.8 billion in payments for customers, which more than doubled from 2013. While Stripe doesn’t release the amount of payments it processes, sources familiar with the matter said that it’s in a similar range as Braintree but growing faster.

Moritz, one of the early investors in PayPal, believes Stripe has more analogies to Amazon Web Services, Amazon’s (AMZN) multi-billion dollar cloud computing business that powers computing for business customers, than it does to PayPal. “Similar to AWS, Stripe relieves a massive burden for companies with payments, allowing a customer to focus on their core business and, trust Stripe to do spectacular job on their behalf.”

“The opportunity and the challenge for Stripe will be to be the first truly global Internet company,” Moritz said.

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