16 ms·

Stripe Is Now a $20B Company

563 points by jonknee 8y ago

superasn 8y ago
The thing I love most about Stripe is that they have invested quite a lot of resources in their Atlas program to help people from around the world get a level playing field. Before Stripe Atlas there was not a single resource that would allow a non American to setup a bank account for their company totally virtually without ever visiting US (i know because I spoke to at least a dozen of different people and everyone agreed that while they could open a company for me, opening a bank account was impossible after the patriot law (?) yet somehow Stripe managed to do it). So not only they have made great accomplishments in the dev part with their amazing API they have also made a huge difference in many other aspects too that only a few know about.
- SeanAppleby 8y ago
  My startup went through Atlas a couple years ago when it was in beta, and it was amazing. It let us focus on actually building the business rather than screwing around with generic corporate structure and banking, and the team seemed to be fully invested in removing as much legal noise from starting companies as they possibly could. Any problems we had they were there with us to make them disappear. John Collison apparently said the goal of Atlas was to have an impact on access to entrepreneurship that would be visible in macroeconomic indicators, and the team seemed to really be putting in the work to reduce barriers to entrepreneurship and make that happen. And all of it for $500, and they gave us like $5k in AWS credits. It was such a good deal that it didn't even make sense, which I assumed was because it was in beta, but it doesn't even look like it has changed.
  - jaggederest 8y ago
    It's the classic "grow the pie" strategy - if you create more customers that feed into using your service, it's worth it even if you're running a modest loss. Think of it as a marketing or business development strategy, rather than a service of its own.
    - mikeleeorg 8y ago
      And such a great business development strategy at that. It's a win/win for everyone involved. Other online payment providers didn't have the foresight to create Atlas, and it's a testament to Stripe's brainpower that they had this idea and pulled it off so well. I just noticed that their vision is to "build the economic infrastructure for the internet." That's ambitious. I wouldn't have guessed, from that vision, that they'd build Atlas. But in hindsight, it makes a lot of sense.
- rz2k 8y ago
  "Do things that don't scale"[1] references Stripe specifically for actively recruiting users, but your description of the Atlas program makes it sound like an extension of that strategy. Whereas launching in a single tiny overseas market probably didn't look like it had favorable numbers in absolute terms, they probably got better at opening new markets after each success, and an ever-increasing portfolio would made it increasingly difficult for competitors to imagine ever catching up. [1] http://paulgraham.com/ds.html http://paulgraham.com/ds.html
- jczhang 8y ago
  How did Stripe bypass the law here?
  - ceejayoz 8y ago
    I suspect it's less "bypass" and more "did the extra research/work".
  - Operyl 8y ago
    I don’t think there were laws preventing it. Just skiddish banks.
  - azernik 8y ago
    They didn't. It was all stuff that was technically legal, but required founders to hire a US lawyer to handle the paperwork for them and to make lots of micro-decisions about a legal system with which they were unfamiliar.
- aidos 8y ago
  Stripe are just awesome. Thing I love most about them were the capture the flag comps they did. Seriously. So much love for those games.
- deleted 8y ago
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- ttcbj 8y ago
  In addition to focusing on international, they are still focused on very small companies. I went to a conference for small solo entrepreneurs this year, and they had a heavy presence. They also acquired/supported indie hackers. Now that they are giant, it would be so easy for them to write off the small customer, but they continue outreach. Its strange that I have such positive feelings about a payment processor, because payment processing isn't a major issue for our business, but they have just been good to do business with compared to the 3 other processors I had before, and that makes me like them.
cloakedarbiter 8y ago
> Several large new customers have also been listed on Stripe's website this week, including Alphabet Inc.’s Google and Uber Technologies Inc. If Uber is now running payments exclusively through Stripe instead of Braintree, that is a significant blow. I heard that Uber's payments through Braintree was a significant portion of Braintree's total revenue, don't recall the exact number I heard, but it was something on the order of 25% to 40%.
- djajshgsjja 8y ago
  I wouldn’t assume it’s exclusive. At the scale of Uber, it may be worth keeping both systems running and split usage between the two to negotiate the best rates.
  - dajohnson89 8y ago
    That also has the benefit of system redundancy, in case one goes down.
    - captain_perl 8y ago
      Large companies typically do payments in batches, not one-by-one, so the redundancy is not needed. However, if they're trying to do per ride auths, then they might need redundancy there. Hard to imagine they do that.
      - philip1209 8y ago
        I don't think they auth per ride. I definitely had a "you owe us money" flow after getting food successfully delivered though Uber eats on a deactivated card.
        adw 8y ago
        I get push notifications on auth on both my debit and credit cards. Weak evidence, but my hunch based on what I see there is that there's some dollar value where they pre-auth (somewhere around $25, I think).
deleted 8y ago
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dawhizkid 8y ago
I have heard for years people criticizing the payments industry as a low margin commodity biz. What has changed? Or they just got it wrong?
- VintageLight 8y ago
  An explosion of e-commerce, partly initiated and made possible by Stripe
- ahstilde 8y ago
  The first principles changed. From Elad Gil in First Round Review: “In the tech world, particularly after PayPal was sold to eBay, the dogma for many years was ‘Don't ever do payments, it's too hard and fraud will blow up and destroy you.’ And during the first internet wave, that was true. It was a challenge to get the type of data and information you needed to really deal with fraud at scale,” he says. “But fast forward to today and take a look at companies such as Stripe and Affirm. It seems that the fraud problems weren’t as bad as we thought and we’ve since developed systems, processes and data science tools that just didn’t exist back then. So if you’d applied first principles thinking five or 10 years ago, asking if those assumptions were still true and digging into whether it was still too hard, then maybe you would have come to a very different conclusion about starting a payments company and gotten ahead of the curve.” http://firstround.com/review/future-founders-heres-how-to-spot-and-build-in-nonobvious-markets/ http://firstround.com/review/future-founders-heres-how-to-sp...
  - abalone 8y ago
    That still doesn't explain margins though. Competing processors keep pace with fraud-fighting tech as well. For large customers, processing is still a commodity service and they have a lot of negotiating power to call up Stripe and demand they lower their rates. Until we see Stripe's financials I would not assume anything about healthy margins. Square also had a lot of hype in the early days but turns out their processing margins were really low and most of their current valuation is from expanding into other products like business loans. Stripe's valuation is similarly based on a hypey "grand vision" to offer other services that actually make money, not by magically making businesses pay more for commodity services.
RegicidalManiac 8y ago
One of the few companies that I feel 100% deserves this kind of valuation.
ocdtrekkie 8y ago
It's easy to see how, taking a cut off the top of a huge percentage of online purchases is an insanely nice place to be. I've personally found myself preferring Stripe-based payments when there are multiple options (such as PayPal and Amazon pay) as well. Maybe I'm wrong on this, but I feel like dropping my credit card details into a Stripe window is more private than connecting to PayPal or Amazon accounts. It feels more like just swiping a credit card at a store.
haaen 8y ago
Stripe is the second most valuable YC company. Total valuation of all companies that YC funded (more than 1,900) now exceeds 100 billon dollars. Airbnb has a private valuation of 31 billion. Stripe has a private valuation of 20 billion. Dropbox has a public valuation (DBX) of 11 billion. So the two most valuable companies account for about half the total value of all the YC companies. This is what a power law looks like!
- lifeisstillgood 8y ago
  To the founders and employees of all the other less "powerful" companies - well done too ... making the world better, however you are doing it, is powerful work. keep it up :-)
  - martinvol 8y ago
    You should google power law, I think you misunderstood everything and have a chance to learn an amazing statistical concept today :)
    - jzoch 8y ago
      How did you come to the conclusion that he misunderstood anything at all? Reading his comment I cant see how you think that.
    - lifeisstillgood 8y ago
      No I understand it. I even have at least one book extolling it in business and life. I just wanted to convey that the sheer act of starting and running any (non evil) business is a Good Thing and worth doing irrespective of your valuation, power laws or not. More power to their elbows. (That is such a flexible word!) Any way, assuming power laws hold in life is like assuming financial markets have normal distributions - it's gravy while true, but if it ain't so, things can get hairy. :-)
- ransom1538 8y ago
  "This is what a power law looks like!" Exactly. That is why, now, if a VC looks at your company they think: "Will this company be worth more than all the companies we have ever funded combined". So if the idea isn't something close to that power law, they are out. My 'buy Japanese bubble gum' idea might not hit that.
40acres 8y ago
In 2017 e-commerce accounted for 9% of all retail sales. If I recall correctly, Amazon is the biggest e-commerce vendor and they are using Stripe. There are no sure bets in business, but If I had to bet on a private software company's survival 20-25 years down the road I'd be hard pressed to bet against Stripe. I also think their leadership is very impressive w/ the Collision bros at the helm.
- pythonaut_16 8y ago
  I hadn't heard about Amazon using Stripe before. Here's an article from 2017 talking about it: https://www.geekwire.com/2017/amazon-quietly-starts-using-stripe-process-e-commerce-transactions/ https://www.geekwire.com/2017/amazon-quietly-starts-using-st...
  - ttul 8y ago
    Amazing. I wonder why? Amazon must have insane deals with the credit cards. This must be to access some tech that amazon doesn’t want to replicate for some small slice of its business - maybe on the fraud side.
    - was_boring 8y ago
      I would imagine that they have an integration with dozens of providers. It makes sense to spread it out so your business cannot be bullied by any single third party dependency and you can pit them against each other to get favorable terms across the board.
      - debacle 8y ago
        When you are as big as Amazon, there's a lot of money left on the table if you're running payments through a third party.
        Aeolun 8y ago
        Not necessarily. You can likely bring your own processor and the deal you negotiated with them.
haaen 8y ago
Some valuation context, although I'm fully aware that Stripe is a private company and that many of its investors could have investing or striking privileges. Stripe: 20 billion. Adyen (stock symbol: ADYEN) 19 billion. Shopify (stock symbol: SHOP) 17 billion. Square (stock symbol: SQ) 39 billion. Paypal (stock symbol: PYPL) 107 billion. Paypal cofounders Elon Musk and Thiel are early Stripe investors. Former Paypal EVP Keith Rabois is a Stripe investor and was COO of Square.
- deleted 8y ago
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- toptal 8y ago
  Adyen is actually 23b as the 19b you mentioned is in Euros. It’s also noteworthy that Stripe has about 1/2 the revenue and the same growth as Adyen, so it will be interesting to see how this plays out in the public markets given that they have nearly identical business models.
  - haaen 8y ago
    You are right. Right now, 1 euro is worth about 1.17 dollars.
  - deleted 8y ago
    [deleted]
- ashelmire 8y ago
  Payments are and probably always will be a huge market. I think it's a good space to be in, even if you aren't the biggest in it.
neximo64 8y ago
Now only if it didn’t take 7 days to get your payment processed
- collision 8y ago
  Which country are you in? We're working on speeding up payout times around the world -- it's something people are (rightly) very sensitive to. If you email me at john@stripe.com I can look into it for you.
  - Beefin 8y ago
    Impressed you took the time to find critique and respond to it.
  - rawoke083600 8y ago
    Hi John, using this opportunity to ask when you guys coming to South Africa? We REALLY need some international processing here
- joering2 8y ago
  You are lucky! Argentina is over 3 months (!) I moved on to Gate2shop and Argentina payouts are once a week.
  - jp_sc 8y ago
    You are lucky! In Peru we can't use Stripe at all.
    - OJFord 8y ago
      You are lucky! In Yorkshire, Stripe uses us! https://en.wikipedia.org/wiki/Four_Yorkshiremen_sketch https://en.wikipedia.org/wiki/Four_Yorkshiremen_sketch
aczerepinski 8y ago
Pretty annoying that it’s illegal for me to invest in any of these newish tech companies.
- xseven 8y ago
  Why is it illegal? How would you invest in them if it were legal?
  - lastofus 8y ago
    They are probably referring to not being an accredited investor. https://en.wikipedia.org/wiki/Accredited_investor https://en.wikipedia.org/wiki/Accredited_investor
    - aczerepinski 8y ago
      Indeed. In an era where hot tech companies don't go public until they've eclipsed $20B (if ever!), the accredited investor rule feels like the rich & powerful making sure they can keep all of the best opportunities to themselves.
- gamblor956 8y ago
  It's not illegal for you to invest in Stripe. It's simply illegal for Stripe to try and sell you their stock. If you happen to have personal connections to Stripe leadership, and they haven't hit the regulatory shareholder limit (after which they must start filing disclosures with the SEC), you could legally buy all the Stripe stock you could afford.
  - woolvalley 8y ago
    So the accredited investor requirement doesn't apply in the case you stated?
    - gamblor956 8y ago
      The accredited investor rules are limits on the company, not the investor. It depends on how many non accredited investors they have.
amelius 8y ago
How much money would it take to duplicate the offerings and marketing of Stripe. And shouldn't that be the actual valuation?
- ergothus 8y ago
  And when we have a formula that can express developing a user base and market trust, particularly in the face of a company that already has it, may be we will. Until then, it's not terribly accurate to say "A team of 5 can write it in 6 months, so call it $2 mill valuation after hardware and support" because spending some money to have the exact product DOESN'T mean you have nor can get their customers.
  - amelius 8y ago
    $2 mil on devs and $1B on marketing should do it.
- goeric 8y ago
  AND all their current customers (and customer pipeline) AND their roadmap.
sxp62000 8y ago
So happy to hear. They deserve it! Couldn't remember the name for a second, but so glad I never have to deal with authorize.net again ... ever!
- byron_fast 8y ago
  I once wrote an OLE control from Authorize.net that used XML in Powerbuilder to communicate with a Lisp server to do my payments. Stripe is better :)
byron_fast 8y ago
It would be great if they never go public.
- byron_fast 8y ago
  They are a great example of how an API is all that really matters. Anyone could have done their biz, but they made a good API.
  - gakos 8y ago
    I agree that their API is great, but there's so much more to building a business - most of all perseverance. Many people can make a good or great API but very few can execute on the rest.
    - byron_fast 8y ago
      Well in this case their API is backed by a connection to credit card systems... the hard part. The card companies could have done it, but they needed Stripe to show how obvious it is.
      - adventured 8y ago
        The reason Stripe exists is because the card companies couldn't do it. They were incompetent, unimaginative, lazy, slow, arrogant, etc. Exactly what you typically see out of entrenched goliaths. It's the same reason several of them that have tried can't catch up with Stripe, despite trying for years, despite vast resources, and despite Stripe showing them how to do it. It's only in a non-reality-touching theory that the card companies could have done it (ie if you entirely disregard everything about them and only focus on resources and then give them attributes they don't possess). In actuality, they couldn't do it. Microsoft and Nokia couldn't have produced the iPhone. IBM couldn't have produced AWS. AOL couldn't have produced Google. Disney couldn't have produced Netflix. Facebook couldn't have produced Instagram. Xerox couldn't have produced the Apple II. Sony and Microsoft couldn't have produced Steam. GM and Ford couldn't have produced the Model S. Boeing and Lockheed couldn't have produced the Falcon 9. Wyndham and Hilton couldn't have produced Airbnb. The taxi cartels couldn't have produced Uber or Lyft. Culture acting as an innovation blockade is the unifying impediment between them all, not lack of resources or that something was technically too challenging.
AndrewWarner 8y ago
As a client, I love working with them. I never thought I'd say that about a payment processor. I get pitched lower rates by their competitors all the time, but their software sucks. Giving a refund on Authorize.net feels like I'm being forced to travel back to the 1990s web. Stripe's site is intuitive, their rates are good, they integrate easily with every software I use and their customer service speaks to me like humans. (Plus they have patio11)
- puranjay 8y ago
  I'm not even a Stripe customer but I still like to visit their site from time to time for design cues. Of mainstream B2B tech companies, I think Stripe has some of the best front end design I've ever seen. Everything is gorgeous AND useful. And despite so many products and pages, you never feel disoriented on their site
  - jkeat 8y ago
    Agreed! The sheer amount of landing pages borrowing from Stripe's wide shadow button style is a testament to this
- paulie_a 8y ago
  It's honestly shocking that authorize.net still even exists. It was a piece of shit from the get go and apparently has not improved.
joshmn 8y ago
I want to love Stripe, and I do wish them well, but I've gotten such weird feelings about some of their offerings. On HN and other parts of the internet, representatives go out of their way to make themselves seem available if you have an issue, or have a problem. But when you finally do reach out, I haven't found them to be as receptive as they otherwise portray themselves to be. Maybe it's miscommunication internally, or maybe it's employees not being well-equipped. But when you send a thoughtful, well-written message and don't hear anything back, it makes you wonder if it's just lip service. Whatever it is, good on them for hitting such a great milestone. I know I'll never hit $20B in anything except in Zimbabwean dollars.
- joshpadnick 8y ago
  I recently contacted Stripe about how their Stripe Billing invoices rendered in a confusing way in some situations. Within one week, they fixed the issue. I was pretty impressed by that responsiveness.
- edwinwee 8y ago
  (I work at Stripe.) I'm really sorry to hear that...we do want to be available here any way we can, but something must've went wrong. I'd love to find out. Could you email me at edwin@stripe.com?
  - joshmn 8y ago
    We've spoken Edwin. After our first exchange I didn't hear back from you. The first exchange was great, and unexpected, and maybe it set the bar a little too high. If you didn't have an answer, or had a bad answer, saying anything is better than saying nothing at all. You unintentionally proved my point. It's not like I'm hiding behind this username. I just emailed you and the other relevant parties. Going on the record: Not expecting to hear back. Just wanted to leave my thoughts in the open.
    - tome 8y ago
      I'm looking forward to seeing how this one plays out!
MarkMc 8y ago
I must admit I don't really understand Stripe's competitive advantage. When Uber wants to charge a customer's credit card, their main concern is the payment processor's commission, isn't it? It seems like the ultimate commodity business. Why aren't there 10 payment processors all competing to charge Uber's customer's credit card for a razor-thin fee?
- dasil003 8y ago
  At Uber’s scale, sure, but for smaller companies you have to understand that before Stripe you needed to get your own merchant account and that meant dealing with a bank. That’s one. You also had to deal with a payment gateway, which was pretty horrible before Braintree, and Stripe was another step function, that’s two. The processors are the middleman, and here there is all kinds of details and clever ways fees are sliced. Ubers of the world have the scale to invest in optimizing this but companies smaller than <500 generally don’t and an integrated solution like Stripe just solves a lot of headaches even if it more expensive in the end. Having the expertise to even understand how to optimize payment commissions is non-trivial.
briga 8y ago
Stupid question: how does a $245 million dollars bring a company's valuation from $9 billion to $20 billion? Last I checked, $245 million =/= $11 billion
- sophiebits 8y ago
  It means a VC paid $245 million to purchase 1.225% (which is $245M divided by $20B) of Stripe's stock.
  - adtac 8y ago
    In transactions, is it typical to just create new stock such that the newly created stock is 1.225% of the final total? Would the previous investors agree to diluting their stock like that? Or is it common to sell from a common pool of stock that's owned by the company (who is that? the CEO? what is the company if not for the stock distribution?)?
    - roel_v 8y ago
      You should read a book on this, it's not something that someone can/will explain in a one off paragraph comment.
      - adtac 8y ago
        Any recommendations? Thanks!
        roel_v 8y ago
        I was assigned several in lae school, they wouldn't be relevant to you. Any introduction book on corporate structure and corporate governance would do as a foundation (for your jurisdiction) I would imagine, any specific questions you would have after that would be answered in the followup material in the references of such a book. Business school and law school students have to buy many books on these topics, and their resale value is low. Any second hand book shop has lots of them, so does abebooks. It doesn't have to be expensive, it's the time you have to invest that 'costs' (in the generalized economic sense) the most.
Firebrand 8y ago
So maybe I don’t understand because I’m a dumb-dumb lay person, but what does Stripe do differently from all the other payment processors that has given its rise and hype. Is Stripe popular because its developer friendly? What makes it better than Apple Pay, PayPal, and Square? Normally, when I shop online, I’m usually given an option to type my credit card info or use my PayPal account. Where does Stripe fit into all of this?
- rtx 8y ago
  One thing I have personally seen that, they have lower threshold for accepting clients. Maybe they rely more on fraud detection than on pre-signup verification.
- Shounak 8y ago
  Stripe is a payment processor, so when you type in your credit card info, that’s Stripe processing that payment.
- rubyfan 8y ago
  The little box you type your credit card in is a huge pain in the ass for companies larger and small due to some compliance requirements from financial institutions called PCI. I can’t understate the ass pain, system complexity, legal review, etc etc that this can bring. Doesn’t matter if you are big or small, it’s painful and can be costly. Big companies can pay to handle that, smaller companies can’t and have relied on historically clunky solutions to take payments. Stripe can make that little box you type your credit card painless, seamless and highly accessible for small and large companies. They are generally delivering a high quality experience throughout their process and many of their staff are generally awesome. Full disclosure, I work at a big company and we use Stripe. I used to work at startups in the early 2000s and handled payment solutions. The world is better with Stripe.
  - YPCrumble 8y ago
    You didn’t answer the question. What makes stripe different from Square?
aacook 8y ago
Stripe's awesome. I'm in YC's startup school and used Stripe Atlas to incorporate. I got an email from Stripe, sharing an opportunity to post your landing page and get feedback from Stripe's design team. That Friday I got an awesome teardown from Stripe's design team. The page (https://nanagram.co https://nanagram.co) still has quite a ways to go, but I incorporated most of their feedback and I'm super happy with it. Another cool thing — Through the grapevine I found out Patrick mentioned NanaGram at an all-hands meeting. I sent him a quick email to say thanks for the mention, not expecting a reply whatsoever, and within a few hours he responded. Stripe's kind of mind-blowing in their ability to not only build a great product but also to serve the community and be human.
- moeamaya 8y ago
  That's great on Stripe, but tbh your product is awesome. If I was an angel investor, I'd happily put money into this and recommend you to my family. Keep up the great work!
  - aacook 8y ago
    This is very nice of you. I'm due to visit my 94-year-old grandma tomorrow and will be printing this out and showing it to her. Cheers.
- deleted 8y ago
  [deleted]
- lifeisstillgood 8y ago
  One minor nitpick - just tried to sign up, and if I was a USA user, then your page would have unhidden the pricing buttons. but as I was UK user, it did not unhide anything (not even a sorry!). As such i was left with the default waitlist boxes, and was confused as to whether I was signing up or not. (it's possible it did unhide the sorry, but it was not clear on the smaller screen... maybe a splash of colour? Perhaps "Sorry based on your selections above we don't yet offer the service in your country - sign up below for notifications." You kind of do say that but like I said confused) Anyway it looks a great service, and I am now on the wait list
illteratedang 8y ago
Should we celebrate this? This is exactly what fuels inequality in the first place. Stripe should be nationalized and profit should be distributed among the poorest of the Americans.
bschwindHN 8y ago
A bit off topic but I'll ask it here anyway - I see Stripe Atlas advertised as an easy way to start an "Internet Business". What exactly is the definition of an Internet Business? If I sold a physical product, would I still be able to set up the company through Stripe Atlas?
- patio11 8y ago
  I work on Stripe Atlas. Your question is answered in a bit more detail here: https://stripe.com/docs/atlas#should https://stripe.com/docs/atlas#should (and the answer below that one). We have a number of product decisions to make about how we do things, so the design center of Stripe Atlas is Internet companies. If one incorporates e.g. a Delaware LLC through Stripe Atlas, that’s an LLC. LLCs can e.g. own apartment buildings. We generally assume you probably won’t use us to form an LLC to own and operate an apartment building. There is, at present, no plan to have an Atlas meetup to swap tips on finding great exterminators. But if e.g. you sell SaaS, we have a lot to say about selling SaaS, and your peers in Atlas will run businesses similar in character to yours. Many Stripe Atlas companies sell physical products; most of them are technically-enabled or sold over the Internet. If we were hypothetically not able to support a product business, it would not be because it is physical, it would be for one of the reasons on the link above.
rawoke083600 8y ago
Please come to South Africa! We need a decent alternative to PayPal for international payments/subscriptions
progx 8y ago
$20B and still need funding rounds.
jorangreef 8y ago
https://stripe.com/global https://stripe.com/global shows a continent with no lights on. Please come to Africa. The lights are on here.
- yomielu 8y ago
  Hey. Fellow African here :) What part of Africa are you in? Asking because I work at Flutterwave, flutterwave.com (a payment processing company) and we can definitely help you to process payments.

563 points by jonknee 8y ago

The thing I love most about Stripe is that they have invested quite a lot of resources in their Atlas program to help people from around the world get a level playing field. Before Stripe Atlas there was not a single resource that would allow a non American to setup a bank account for their company totally virtually without ever visiting US (i know because I spoke to at least a dozen of different people and everyone agreed that while they could open a company for me, opening a bank account was impossible after the patriot law (?) yet somehow Stripe managed to do it). So not only they have made great accomplishments in the dev part with their amazing API they have also made a huge difference in many other aspects too that only a few know about.

SeanAppleby 8y ago
My startup went through Atlas a couple years ago when it was in beta, and it was amazing. It let us focus on actually building the business rather than screwing around with generic corporate structure and banking, and the team seemed to be fully invested in removing as much legal noise from starting companies as they possibly could. Any problems we had they were there with us to make them disappear. John Collison apparently said the goal of Atlas was to have an impact on access to entrepreneurship that would be visible in macroeconomic indicators, and the team seemed to really be putting in the work to reduce barriers to entrepreneurship and make that happen. And all of it for $500, and they gave us like $5k in AWS credits. It was such a good deal that it didn't even make sense, which I assumed was because it was in beta, but it doesn't even look like it has changed.
- jaggederest 8y ago
  It's the classic "grow the pie" strategy - if you create more customers that feed into using your service, it's worth it even if you're running a modest loss. Think of it as a marketing or business development strategy, rather than a service of its own.
  - mikeleeorg 8y ago
    And such a great business development strategy at that. It's a win/win for everyone involved. Other online payment providers didn't have the foresight to create Atlas, and it's a testament to Stripe's brainpower that they had this idea and pulled it off so well. I just noticed that their vision is to "build the economic infrastructure for the internet." That's ambitious. I wouldn't have guessed, from that vision, that they'd build Atlas. But in hindsight, it makes a lot of sense.
rz2k 8y ago
"Do things that don't scale"[1] references Stripe specifically for actively recruiting users, but your description of the Atlas program makes it sound like an extension of that strategy. Whereas launching in a single tiny overseas market probably didn't look like it had favorable numbers in absolute terms, they probably got better at opening new markets after each success, and an ever-increasing portfolio would made it increasingly difficult for competitors to imagine ever catching up. [1] http://paulgraham.com/ds.html http://paulgraham.com/ds.html
jczhang 8y ago
How did Stripe bypass the law here?
- ceejayoz 8y ago
  I suspect it's less "bypass" and more "did the extra research/work".
- Operyl 8y ago
  I don’t think there were laws preventing it. Just skiddish banks.
- azernik 8y ago
  They didn't. It was all stuff that was technically legal, but required founders to hire a US lawyer to handle the paperwork for them and to make lots of micro-decisions about a legal system with which they were unfamiliar.
aidos 8y ago
Stripe are just awesome. Thing I love most about them were the capture the flag comps they did. Seriously. So much love for those games.
deleted 8y ago
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ttcbj 8y ago
In addition to focusing on international, they are still focused on very small companies. I went to a conference for small solo entrepreneurs this year, and they had a heavy presence. They also acquired/supported indie hackers. Now that they are giant, it would be so easy for them to write off the small customer, but they continue outreach. Its strange that I have such positive feelings about a payment processor, because payment processing isn't a major issue for our business, but they have just been good to do business with compared to the 3 other processors I had before, and that makes me like them.

cloakedarbiter 8y ago

> Several large new customers have also been listed on Stripe's website this week, including Alphabet Inc.’s Google and Uber Technologies Inc. If Uber is now running payments exclusively through Stripe instead of Braintree, that is a significant blow. I heard that Uber's payments through Braintree was a significant portion of Braintree's total revenue, don't recall the exact number I heard, but it was something on the order of 25% to 40%.

djajshgsjja 8y ago
I wouldn’t assume it’s exclusive. At the scale of Uber, it may be worth keeping both systems running and split usage between the two to negotiate the best rates.
- dajohnson89 8y ago
  That also has the benefit of system redundancy, in case one goes down.
  - captain_perl 8y ago
    Large companies typically do payments in batches, not one-by-one, so the redundancy is not needed. However, if they're trying to do per ride auths, then they might need redundancy there. Hard to imagine they do that.
    - philip1209 8y ago
      I don't think they auth per ride. I definitely had a "you owe us money" flow after getting food successfully delivered though Uber eats on a deactivated card.
      - adw 8y ago
        I get push notifications on auth on both my debit and credit cards. Weak evidence, but my hunch based on what I see there is that there's some dollar value where they pre-auth (somewhere around $25, I think).

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dawhizkid 8y ago

I have heard for years people criticizing the payments industry as a low margin commodity biz. What has changed? Or they just got it wrong?

VintageLight 8y ago
An explosion of e-commerce, partly initiated and made possible by Stripe
ahstilde 8y ago
The first principles changed. From Elad Gil in First Round Review: “In the tech world, particularly after PayPal was sold to eBay, the dogma for many years was ‘Don't ever do payments, it's too hard and fraud will blow up and destroy you.’ And during the first internet wave, that was true. It was a challenge to get the type of data and information you needed to really deal with fraud at scale,” he says. “But fast forward to today and take a look at companies such as Stripe and Affirm. It seems that the fraud problems weren’t as bad as we thought and we’ve since developed systems, processes and data science tools that just didn’t exist back then. So if you’d applied first principles thinking five or 10 years ago, asking if those assumptions were still true and digging into whether it was still too hard, then maybe you would have come to a very different conclusion about starting a payments company and gotten ahead of the curve.” http://firstround.com/review/future-founders-heres-how-to-spot-and-build-in-nonobvious-markets/ http://firstround.com/review/future-founders-heres-how-to-sp...
- abalone 8y ago
  That still doesn't explain margins though. Competing processors keep pace with fraud-fighting tech as well. For large customers, processing is still a commodity service and they have a lot of negotiating power to call up Stripe and demand they lower their rates. Until we see Stripe's financials I would not assume anything about healthy margins. Square also had a lot of hype in the early days but turns out their processing margins were really low and most of their current valuation is from expanding into other products like business loans. Stripe's valuation is similarly based on a hypey "grand vision" to offer other services that actually make money, not by magically making businesses pay more for commodity services.

RegicidalManiac 8y ago

One of the few companies that I feel 100% deserves this kind of valuation.

ocdtrekkie 8y ago

It's easy to see how, taking a cut off the top of a huge percentage of online purchases is an insanely nice place to be. I've personally found myself preferring Stripe-based payments when there are multiple options (such as PayPal and Amazon pay) as well. Maybe I'm wrong on this, but I feel like dropping my credit card details into a Stripe window is more private than connecting to PayPal or Amazon accounts. It feels more like just swiping a credit card at a store.

haaen 8y ago

Stripe is the second most valuable YC company. Total valuation of all companies that YC funded (more than 1,900) now exceeds 100 billon dollars. Airbnb has a private valuation of 31 billion. Stripe has a private valuation of 20 billion. Dropbox has a public valuation (DBX) of 11 billion. So the two most valuable companies account for about half the total value of all the YC companies. This is what a power law looks like!

lifeisstillgood 8y ago
To the founders and employees of all the other less "powerful" companies - well done too ... making the world better, however you are doing it, is powerful work. keep it up :-)
- martinvol 8y ago
  You should google power law, I think you misunderstood everything and have a chance to learn an amazing statistical concept today :)
  - jzoch 8y ago
    How did you come to the conclusion that he misunderstood anything at all? Reading his comment I cant see how you think that.
  - lifeisstillgood 8y ago
    No I understand it. I even have at least one book extolling it in business and life. I just wanted to convey that the sheer act of starting and running any (non evil) business is a Good Thing and worth doing irrespective of your valuation, power laws or not. More power to their elbows. (That is such a flexible word!) Any way, assuming power laws hold in life is like assuming financial markets have normal distributions - it's gravy while true, but if it ain't so, things can get hairy. :-)
ransom1538 8y ago
"This is what a power law looks like!" Exactly. That is why, now, if a VC looks at your company they think: "Will this company be worth more than all the companies we have ever funded combined". So if the idea isn't something close to that power law, they are out. My 'buy Japanese bubble gum' idea might not hit that.

40acres 8y ago

In 2017 e-commerce accounted for 9% of all retail sales. If I recall correctly, Amazon is the biggest e-commerce vendor and they are using Stripe. There are no sure bets in business, but If I had to bet on a private software company's survival 20-25 years down the road I'd be hard pressed to bet against Stripe. I also think their leadership is very impressive w/ the Collision bros at the helm.

pythonaut_16 8y ago
I hadn't heard about Amazon using Stripe before. Here's an article from 2017 talking about it: https://www.geekwire.com/2017/amazon-quietly-starts-using-stripe-process-e-commerce-transactions/ https://www.geekwire.com/2017/amazon-quietly-starts-using-st...
- ttul 8y ago
  Amazing. I wonder why? Amazon must have insane deals with the credit cards. This must be to access some tech that amazon doesn’t want to replicate for some small slice of its business - maybe on the fraud side.
  - was_boring 8y ago
    I would imagine that they have an integration with dozens of providers. It makes sense to spread it out so your business cannot be bullied by any single third party dependency and you can pit them against each other to get favorable terms across the board.
    - debacle 8y ago
      When you are as big as Amazon, there's a lot of money left on the table if you're running payments through a third party.
      - Aeolun 8y ago
        Not necessarily. You can likely bring your own processor and the deal you negotiated with them.

haaen 8y ago

Some valuation context, although I'm fully aware that Stripe is a private company and that many of its investors could have investing or striking privileges. Stripe: 20 billion. Adyen (stock symbol: ADYEN) 19 billion. Shopify (stock symbol: SHOP) 17 billion. Square (stock symbol: SQ) 39 billion. Paypal (stock symbol: PYPL) 107 billion. Paypal cofounders Elon Musk and Thiel are early Stripe investors. Former Paypal EVP Keith Rabois is a Stripe investor and was COO of Square.

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toptal 8y ago
Adyen is actually 23b as the 19b you mentioned is in Euros. It’s also noteworthy that Stripe has about 1/2 the revenue and the same growth as Adyen, so it will be interesting to see how this plays out in the public markets given that they have nearly identical business models.
- haaen 8y ago
  You are right. Right now, 1 euro is worth about 1.17 dollars.
- deleted 8y ago
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ashelmire 8y ago
Payments are and probably always will be a huge market. I think it's a good space to be in, even if you aren't the biggest in it.

neximo64 8y ago

Now only if it didn’t take 7 days to get your payment processed

collision 8y ago
Which country are you in? We're working on speeding up payout times around the world -- it's something people are (rightly) very sensitive to. If you email me at john@stripe.com I can look into it for you.
- Beefin 8y ago
  Impressed you took the time to find critique and respond to it.
- rawoke083600 8y ago
  Hi John, using this opportunity to ask when you guys coming to South Africa? We REALLY need some international processing here
joering2 8y ago
You are lucky! Argentina is over 3 months (!) I moved on to Gate2shop and Argentina payouts are once a week.
- jp_sc 8y ago
  You are lucky! In Peru we can't use Stripe at all.
  - OJFord 8y ago
    You are lucky! In Yorkshire, Stripe uses us! https://en.wikipedia.org/wiki/Four_Yorkshiremen_sketch https://en.wikipedia.org/wiki/Four_Yorkshiremen_sketch

aczerepinski 8y ago

Pretty annoying that it’s illegal for me to invest in any of these newish tech companies.

xseven 8y ago
Why is it illegal? How would you invest in them if it were legal?
- lastofus 8y ago
  They are probably referring to not being an accredited investor. https://en.wikipedia.org/wiki/Accredited_investor https://en.wikipedia.org/wiki/Accredited_investor
  - aczerepinski 8y ago
    Indeed. In an era where hot tech companies don't go public until they've eclipsed $20B (if ever!), the accredited investor rule feels like the rich & powerful making sure they can keep all of the best opportunities to themselves.
gamblor956 8y ago
It's not illegal for you to invest in Stripe. It's simply illegal for Stripe to try and sell you their stock. If you happen to have personal connections to Stripe leadership, and they haven't hit the regulatory shareholder limit (after which they must start filing disclosures with the SEC), you could legally buy all the Stripe stock you could afford.
- woolvalley 8y ago
  So the accredited investor requirement doesn't apply in the case you stated?
  - gamblor956 8y ago
    The accredited investor rules are limits on the company, not the investor. It depends on how many non accredited investors they have.

amelius 8y ago

How much money would it take to duplicate the offerings and marketing of Stripe. And shouldn't that be the actual valuation?

ergothus 8y ago
And when we have a formula that can express developing a user base and market trust, particularly in the face of a company that already has it, may be we will. Until then, it's not terribly accurate to say "A team of 5 can write it in 6 months, so call it $2 mill valuation after hardware and support" because spending some money to have the exact product DOESN'T mean you have nor can get their customers.
- amelius 8y ago
  $2 mil on devs and $1B on marketing should do it.
goeric 8y ago
AND all their current customers (and customer pipeline) AND their roadmap.

sxp62000 8y ago

So happy to hear. They deserve it! Couldn't remember the name for a second, but so glad I never have to deal with authorize.net again ... ever!

byron_fast 8y ago
I once wrote an OLE control from Authorize.net that used XML in Powerbuilder to communicate with a Lisp server to do my payments. Stripe is better :)

byron_fast 8y ago

It would be great if they never go public.

byron_fast 8y ago
They are a great example of how an API is all that really matters. Anyone could have done their biz, but they made a good API.
- gakos 8y ago
  I agree that their API is great, but there's so much more to building a business - most of all perseverance. Many people can make a good or great API but very few can execute on the rest.
  - byron_fast 8y ago
    Well in this case their API is backed by a connection to credit card systems... the hard part. The card companies could have done it, but they needed Stripe to show how obvious it is.
    - adventured 8y ago
      The reason Stripe exists is because the card companies couldn't do it. They were incompetent, unimaginative, lazy, slow, arrogant, etc. Exactly what you typically see out of entrenched goliaths. It's the same reason several of them that have tried can't catch up with Stripe, despite trying for years, despite vast resources, and despite Stripe showing them how to do it. It's only in a non-reality-touching theory that the card companies could have done it (ie if you entirely disregard everything about them and only focus on resources and then give them attributes they don't possess). In actuality, they couldn't do it. Microsoft and Nokia couldn't have produced the iPhone. IBM couldn't have produced AWS. AOL couldn't have produced Google. Disney couldn't have produced Netflix. Facebook couldn't have produced Instagram. Xerox couldn't have produced the Apple II. Sony and Microsoft couldn't have produced Steam. GM and Ford couldn't have produced the Model S. Boeing and Lockheed couldn't have produced the Falcon 9. Wyndham and Hilton couldn't have produced Airbnb. The taxi cartels couldn't have produced Uber or Lyft. Culture acting as an innovation blockade is the unifying impediment between them all, not lack of resources or that something was technically too challenging.

AndrewWarner 8y ago

As a client, I love working with them. I never thought I'd say that about a payment processor. I get pitched lower rates by their competitors all the time, but their software sucks. Giving a refund on Authorize.net feels like I'm being forced to travel back to the 1990s web. Stripe's site is intuitive, their rates are good, they integrate easily with every software I use and their customer service speaks to me like humans. (Plus they have patio11)

puranjay 8y ago
I'm not even a Stripe customer but I still like to visit their site from time to time for design cues. Of mainstream B2B tech companies, I think Stripe has some of the best front end design I've ever seen. Everything is gorgeous AND useful. And despite so many products and pages, you never feel disoriented on their site
- jkeat 8y ago
  Agreed! The sheer amount of landing pages borrowing from Stripe's wide shadow button style is a testament to this
paulie_a 8y ago
It's honestly shocking that authorize.net still even exists. It was a piece of shit from the get go and apparently has not improved.

joshmn 8y ago

I want to love Stripe, and I do wish them well, but I've gotten such weird feelings about some of their offerings. On HN and other parts of the internet, representatives go out of their way to make themselves seem available if you have an issue, or have a problem. But when you finally do reach out, I haven't found them to be as receptive as they otherwise portray themselves to be. Maybe it's miscommunication internally, or maybe it's employees not being well-equipped. But when you send a thoughtful, well-written message and don't hear anything back, it makes you wonder if it's just lip service. Whatever it is, good on them for hitting such a great milestone. I know I'll never hit $20B in anything except in Zimbabwean dollars.

joshpadnick 8y ago
I recently contacted Stripe about how their Stripe Billing invoices rendered in a confusing way in some situations. Within one week, they fixed the issue. I was pretty impressed by that responsiveness.
edwinwee 8y ago
(I work at Stripe.) I'm really sorry to hear that...we do want to be available here any way we can, but something must've went wrong. I'd love to find out. Could you email me at edwin@stripe.com?
- joshmn 8y ago
  We've spoken Edwin. After our first exchange I didn't hear back from you. The first exchange was great, and unexpected, and maybe it set the bar a little too high. If you didn't have an answer, or had a bad answer, saying anything is better than saying nothing at all. You unintentionally proved my point. It's not like I'm hiding behind this username. I just emailed you and the other relevant parties. Going on the record: Not expecting to hear back. Just wanted to leave my thoughts in the open.
  - tome 8y ago
    I'm looking forward to seeing how this one plays out!

MarkMc 8y ago

I must admit I don't really understand Stripe's competitive advantage. When Uber wants to charge a customer's credit card, their main concern is the payment processor's commission, isn't it? It seems like the ultimate commodity business. Why aren't there 10 payment processors all competing to charge Uber's customer's credit card for a razor-thin fee?

dasil003 8y ago
At Uber’s scale, sure, but for smaller companies you have to understand that before Stripe you needed to get your own merchant account and that meant dealing with a bank. That’s one. You also had to deal with a payment gateway, which was pretty horrible before Braintree, and Stripe was another step function, that’s two. The processors are the middleman, and here there is all kinds of details and clever ways fees are sliced. Ubers of the world have the scale to invest in optimizing this but companies smaller than <500 generally don’t and an integrated solution like Stripe just solves a lot of headaches even if it more expensive in the end. Having the expertise to even understand how to optimize payment commissions is non-trivial.

briga 8y ago

Stupid question: how does a $245 million dollars bring a company's valuation from $9 billion to $20 billion? Last I checked, $245 million =/= $11 billion

sophiebits 8y ago
It means a VC paid $245 million to purchase 1.225% (which is $245M divided by $20B) of Stripe's stock.
- adtac 8y ago
  In transactions, is it typical to just create new stock such that the newly created stock is 1.225% of the final total? Would the previous investors agree to diluting their stock like that? Or is it common to sell from a common pool of stock that's owned by the company (who is that? the CEO? what is the company if not for the stock distribution?)?
  - roel_v 8y ago
    You should read a book on this, it's not something that someone can/will explain in a one off paragraph comment.
    - adtac 8y ago
      Any recommendations? Thanks!
      - roel_v 8y ago
        I was assigned several in lae school, they wouldn't be relevant to you. Any introduction book on corporate structure and corporate governance would do as a foundation (for your jurisdiction) I would imagine, any specific questions you would have after that would be answered in the followup material in the references of such a book. Business school and law school students have to buy many books on these topics, and their resale value is low. Any second hand book shop has lots of them, so does abebooks. It doesn't have to be expensive, it's the time you have to invest that 'costs' (in the generalized economic sense) the most.

Firebrand 8y ago

So maybe I don’t understand because I’m a dumb-dumb lay person, but what does Stripe do differently from all the other payment processors that has given its rise and hype. Is Stripe popular because its developer friendly? What makes it better than Apple Pay, PayPal, and Square? Normally, when I shop online, I’m usually given an option to type my credit card info or use my PayPal account. Where does Stripe fit into all of this?

rtx 8y ago
One thing I have personally seen that, they have lower threshold for accepting clients. Maybe they rely more on fraud detection than on pre-signup verification.
Shounak 8y ago
Stripe is a payment processor, so when you type in your credit card info, that’s Stripe processing that payment.
rubyfan 8y ago
The little box you type your credit card in is a huge pain in the ass for companies larger and small due to some compliance requirements from financial institutions called PCI. I can’t understate the ass pain, system complexity, legal review, etc etc that this can bring. Doesn’t matter if you are big or small, it’s painful and can be costly. Big companies can pay to handle that, smaller companies can’t and have relied on historically clunky solutions to take payments. Stripe can make that little box you type your credit card painless, seamless and highly accessible for small and large companies. They are generally delivering a high quality experience throughout their process and many of their staff are generally awesome. Full disclosure, I work at a big company and we use Stripe. I used to work at startups in the early 2000s and handled payment solutions. The world is better with Stripe.
- YPCrumble 8y ago
  You didn’t answer the question. What makes stripe different from Square?

aacook 8y ago

Stripe's awesome. I'm in YC's startup school and used Stripe Atlas to incorporate. I got an email from Stripe, sharing an opportunity to post your landing page and get feedback from Stripe's design team. That Friday I got an awesome teardown from Stripe's design team. The page (https://nanagram.co https://nanagram.co) still has quite a ways to go, but I incorporated most of their feedback and I'm super happy with it. Another cool thing — Through the grapevine I found out Patrick mentioned NanaGram at an all-hands meeting. I sent him a quick email to say thanks for the mention, not expecting a reply whatsoever, and within a few hours he responded. Stripe's kind of mind-blowing in their ability to not only build a great product but also to serve the community and be human.

moeamaya 8y ago
That's great on Stripe, but tbh your product is awesome. If I was an angel investor, I'd happily put money into this and recommend you to my family. Keep up the great work!
- aacook 8y ago
  This is very nice of you. I'm due to visit my 94-year-old grandma tomorrow and will be printing this out and showing it to her. Cheers.
deleted 8y ago
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lifeisstillgood 8y ago
One minor nitpick - just tried to sign up, and if I was a USA user, then your page would have unhidden the pricing buttons. but as I was UK user, it did not unhide anything (not even a sorry!). As such i was left with the default waitlist boxes, and was confused as to whether I was signing up or not. (it's possible it did unhide the sorry, but it was not clear on the smaller screen... maybe a splash of colour? Perhaps "Sorry based on your selections above we don't yet offer the service in your country - sign up below for notifications." You kind of do say that but like I said confused) Anyway it looks a great service, and I am now on the wait list

illteratedang 8y ago

Should we celebrate this? This is exactly what fuels inequality in the first place. Stripe should be nationalized and profit should be distributed among the poorest of the Americans.

bschwindHN 8y ago

A bit off topic but I'll ask it here anyway - I see Stripe Atlas advertised as an easy way to start an "Internet Business". What exactly is the definition of an Internet Business? If I sold a physical product, would I still be able to set up the company through Stripe Atlas?

patio11 8y ago
I work on Stripe Atlas. Your question is answered in a bit more detail here: https://stripe.com/docs/atlas#should https://stripe.com/docs/atlas#should (and the answer below that one). We have a number of product decisions to make about how we do things, so the design center of Stripe Atlas is Internet companies. If one incorporates e.g. a Delaware LLC through Stripe Atlas, that’s an LLC. LLCs can e.g. own apartment buildings. We generally assume you probably won’t use us to form an LLC to own and operate an apartment building. There is, at present, no plan to have an Atlas meetup to swap tips on finding great exterminators. But if e.g. you sell SaaS, we have a lot to say about selling SaaS, and your peers in Atlas will run businesses similar in character to yours. Many Stripe Atlas companies sell physical products; most of them are technically-enabled or sold over the Internet. If we were hypothetically not able to support a product business, it would not be because it is physical, it would be for one of the reasons on the link above.

rawoke083600 8y ago

Please come to South Africa! We need a decent alternative to PayPal for international payments/subscriptions

progx 8y ago

$20B and still need funding rounds.

jorangreef 8y ago

https://stripe.com/global https://stripe.com/global shows a continent with no lights on. Please come to Africa. The lights are on here.

yomielu 8y ago
Hey. Fellow African here :) What part of Africa are you in? Asking because I work at Flutterwave, flutterwave.com (a payment processing company) and we can definitely help you to process payments.