Stripe scores Visa partnership, new funding at $5 billion valuation

Stripe and Visa will work together on digital transaction initiatives including buy buttons and tokenization.

Payment processing company Stripe has raised an undisclosed amount of new funding from investors like Visa, Sequoia Capital, AmEx, General Catalyst and Kleiner Perkins, among others.

The investment round, which will be used largely toward global expansion, catapults the young company to a valuation of $5 billion.

Stripe also announced a partnership with credit card behemoth Visa to work on digital transaction initiatives in both security and e-commerce.

More specifically, the deal will give Stripe access to Visa's tokenization service, which swaps credit card numbers for random numerical sequences to make card data useless to hackers.

Visa, meanwhile, will gain entrance to the burgeoning field of "buy buttons" through Stripe's previously established partnerships, like the one it inked with Pinterest to power its Buyable Pins.

Lastly, Visa will help Stripe expand internationally and into emerging markets -- both geographical strongholds for Visa. Currently Stripe is available in 20 countries.

In the five years since its founding, Stripe has made a habit out of landing big-time valuations. The San Francisco-based startup, founded by brothers Patrick and John Collison, started out as a simple alternative to payments processing, with software and services geared toward small-and-medium sized businesses.

Just seven months ago the company announced the close of a $70 million investment round at a valuation of $3.5 billion. That valuation was nearly double its previous one.

Stripe's competitors include PayPal and its Braintree subsidiary, as well as Square.