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Stripe valuation soars to $95B after latest fundraising
- sharkweek 6y agoThrow out any number for Stripe's valuation and I probably believe it at this point. 95B honestly seems relatively cheap. Trying to figure out why this was announced on a Sunday (in the US) though.
- Liron 6y agoAgree, for me it would be a buy at $200B
- repsilat 6y agoFor some context, this is roughly - One tenth of Apple, - One seventh of Google, - (Joke entry: 2/7 Teslas), - More than half a Walmart, - Just under one Netflix, - A SalesForce, - A Pfizer, - Nearly 2 IBMs (Makes sense to me), - 2.7 GMs. Strong statements, though I'll never put money against this sort of thing.
- sharkweek 6y agobut only 1/4th of VISA, who I think they'll overtake in the next decade or so.
- riffraff 6y agoisn't a lot of Stripe's revenue going _through_ VISA? It doesn't seem to me they're replacing them as much as possibly making them more money. I think PayPal should be the better comparison/overtake target, at 290B.
- HappyTypist 6y ago5 years later: Stripe announces B2C bank account offering, with <unique features X, Y, Z>, including an introductory 5% cashback on anything processed through Stripe.
- blueblisters 6y agoCard networks operate on a completely different set of dynamics than payment processors. You need to convince banks to issue and promote your logo. If you want to become your issuer, you now need to keep credit card debt on your books, not to mention customer acquisition costs in the insane rewards-driven card market.
- lotsofpulp 6y agoWhat is Stripe doing that BoA/Chase/Citi/Capital One/US Bank/Wells Fargo isn’t or can’t? What are the profit margins on consumer banking? It seems like a commodity product, I expect it to be not amazing (compared to tech companies’ profit margins). Why would giving 5% cash back solve any of Stripe’s problem? Any of the other banks can do the same now, but they obviously don’t think it’s worth it to lose that much money for customer acquisition, especially when switching costs are so low.
- rainyMammoth 6y agoThis hype tech nonsense is ready for a big time disruption.
- Graffur 6y agoWhat is Stripe's moat? It's developer friendly but from my experience management will only care about the cost.
- pxue 6y agothey locked in the bottom up approach. Payments typically isn't something people have deep knowledge about, so management defer to devs to do the research, when that happens devs going to pick the easiest API to work with.
- that_guy_iain 6y agoHonestly, I find that a lot of the time it's management picks a payment provider and then devs have to implement it. You don't need to have deep knowledge to know you want to accept payments and how much it'll cost. And if I remember correctly when they entered the market they were all about how much you paid was cheaper and clear than with the big boys who all had a higher barrier to entry.
- manishsharan 6y agoThink of it this way: there is no opportunity for an new entrant into this market almost globally. Stripe's fee is low enough and its API is super easy to use and the brand is well loved by most ecommerce companies. A new entrant will have to go up against this enormous amount of goodwill that Stripe has accumulated. The only danger to Stripe is if a major bank decides to get into this space. I work for a major bank and let me assure you that the technical expertise , market savvy and wisdom to pull off a new venture like this just doesnt exist in banks.
- sebmellen 6y agoThis certainly makes Stripe the most valuable private startup in the world. Where does Stripe rank among the world's most valuable private companies, though? It's easy to find lists of dubious quality like this: https://news.yahoo.com/10-most-valuable-private-companies-215920362.html https://news.yahoo.com/10-most-valuable-private-companies-21..., but I'm sure there are more lurking. What are they?
- gota 6y agoYeah, I don't know about these lists. Cargill valued at 40bn when wikipedia says they own 60bn in assets and profiting... https://en.m.wikipedia.org/wiki/Cargill https://en.m.wikipedia.org/wiki/Cargill
- qeternity 6y agoCargill is an agritrader. They are a big company but definitely not as valuable as Stripe (look at some of the other ABCDs). Trading businesses never get high valuations. But they throw off real cash. Different strokes for different folks.
- tryptophan 6y agoTrue. They don't get high valuations because their earnings fluctuate a lot, and their average profit margin is like 1-3%, as compared to like stripe or apple which probably has like 30%.
- nl 6y ago> Cargill valued at 40bn when wikipedia says they own 60bn in assets and profiting This is true, but it's unclear how much debt they are carrying, and a quick Google couldn't find out.
- missedthecue 6y agoKoch Industries is worth well in excess of $100 billion.
- DLay 6y ago
- qntty 6y agohttps://archive.is/mraaX https://archive.is/mraaX
- heavyset_go 6y agoI'm building a non-profit and Stripe fees eat into donations. Are there any good Stripe alternatives out there?
- 1123581321 6y agoAre you already getting the non-profit discount from Stripe? Any processor will cost you something if you take credit card donations.
- ceejayoz 6y agoThe underlying issue is credit cards have interchange fees, which aren't going away anytime soon. PayPal offers a slightly lower transaction rate to non-profits (https://www.paypal.com/us/non-profit/fundraising/fundraising-online https://www.paypal.com/us/non-profit/fundraising/fundraising...) and Stripe appears to have similar (no rates disclosed; https://support.stripe.com/questions/fee-discount-for-nonprofit-organizations https://support.stripe.com/questions/fee-discount-for-nonpro...) but you're not gonna get to zero with anyone. There's always accepting checks and cash. Or ACH payments, but each of these will probably cause drop-off in people who'd prefer to use a CC. I would tend to expect that the ease of donating via CC readily outweighs the fees you'd save by ditching it. I've seen a few charities have a checkbox on the form that says something like "processing this costs us 3%; will you add that much to cover it?"
- heavyset_go 6y agoWe don't expect to get zero fees from any payment processor, we're just at the crossroads of developer convenience and making sure each dollar is maximized, so we're leaning towards discriminating on cost in this case.
- jackson1442 6y agoDid some research a while ago, I believe the Stripe nonprofit fee is unofficially 2.2% + $0.30 on the first 15k/yr, but they may negotiate with you to find something in between that and standard. You do, of course, have to pay Interchange fees no matter what, there's no way to get to 0-fee with a card payment.
- missedthecue 6y agoIs Stripe unprofitable? What kind of scale are they going to reach that will push them over the edge into the black that they haven't been able to reach at the vast scale they already have? If they are profitable, why go the expensive equity route rather than using retained earnings? Or bonds? American Airlines recently sold $10 billion of them at 5.5%. Surely Stripe could do just as well or better.
- SMAAART 6y agoPayment is just the entry point; from there they are probably going to expand into other quasi-bank services; the first low-hanging fruit that comes to mind is Advance Loans secured by CC receivables; easy, popular and highly lucrative.
- TulliusCicero 6y ago> easy, popular and highly lucrative. Eh? How can it be all three of these things at the same time? If it's easy and popular, won't that push down the prices you can charge?
- nl 6y agoFrom the article: Keeping away from the public markets has allowed Stripe to keep a tight lid on financial details; it has not disclosed revenues or profitability. However, a person close to the San Francisco-based company said it handles a larger volume of payments than its European rival Adyen, which has a market capitalisation of €60bn and processed €303.6bn in 2020.
- deleted 6y ago[deleted]
- missedthecue 6y agoIs everyone taking a huge dilution hit worth that 'tight lid'?
- xyzzy_plugh 6y ago
- Taylor_OD 6y agoWow. It takes a lot of money to take on the PayPal monster huh? Incredible.
- kjrose 6y agoWell, and I could be wrong. Paypal was able to be basically a bank without having to follow any of the rules of what a bank needed to follow. Sorta like Uber being a taxi service without having to follow any of the rules of a taxi service. My guess is it's very expensive to beat someone who has already broken the rules to get to where they are before the rules caught up to them.
- davej 6y agoParticularly interesting that the Irish sovereign treasury is co-leading this round.
- polote 6y agoSo Ayden is valued at 100 times revenue. Per the article Stripe is bigger than Ayden and growing faster, so Stripe must be worth more than 100 times revenue and less than 95000/684 = 138 times revenue. So comparatively to Ayden their valuation seems cheap (or they are not bigger than Ayden)
- bitcoinGod88 6y agovaluation should not increase linearly based on revenue. the market winner will eventually get the lions share
- jgalt212 6y agoin credit card processing fees? there aren't many barriers to entry? Even Square is in on the game.
- bitcoinGod88 6y agoHow is stripe not bigger than PP.. i swear few people use pp these days
- ipaddr 6y agoPaypal is a different type of payment option. If I pay via paypal my details are hidden from the store. If I type in my credit card on the site they might use stripe or evopay or something else I wouldn't know either way. My details are save on the site. On digitalocean you can pay via credit card or paypal. If you pay via credit card they take money out for service automatically. If you use paypal you manually buy the amount if credit you wish. Different markets...
- edoceo 6y agoStripe blocks some people who then have to use PayPal, also PP has been around for 20 years and expanded beyond payments, like what Stripe will be doing going forward.
- cecida 6y agoStripe are an engineering first company. You even see the Collison brothers posting here on a regular basis. Creating great tech is built into the DNA of the company. Great to see them investing further in their home country as well, and mentioning that some of their global leadership team will be based in Dublin.
- p1necone 6y agoIreland is also a tax haven, but sure, they're benevolently investing in their home country, that's totally what it is.
- warent 6y agoThey never implied anything about motive. Really, why does motive even matter? Opposing motives can meet on the same positive result. It happens all the time with humans; whether it's two friends, or a corporation of 50,000 people, or a nation of 300 million. Your pessimism seems to ignore the fact that this is a good thing regardless.
- fbelzile 6y agoThey were quoted saying the move "cements [their] Irish roots [and] provides enough space to gradually expand our team." It'd be a breath of fresh air if CEO's could just say it like it is. I think more people would trust their brand and be more willing to invest in them. Our inner monologue wouldn't have had to fill in the blank with a possible hidden motive. Addressing the most common reason why companies "move" to Ireland could have been an opportunity to build trust.
- disgruntledphd2 6y agoBut the brothers are actually Irish, and seem pretty invested in Ireland. Unlike in the case of almost every other tech CEO, who play up features of Ireland that they don't have experience with. Like, I am very glad that the Irish government supported these brothers, and very sad that the Irish banks refused to work with them when they tried to start Stripe in Ireland.
- ffggvv 6y agoam i the only one that thinks fintech is massively overvalued? especially square etc, or anything adjacent. sure they have great growth and revenue but i don’t see any path where profit can justify the value
- lsh123 6y agoThe main value for Stripe is not in the payments processing itself (I would estimate they take about 0.2% from TPV as fees). The main value is the add on services, and in particular short term loans to SMBs secured by incoming payments. Overall, Stripe is a strong and successful business with room to grow. Is >100x P/E justified? Probably not from pure financial perspective. However if you take into account “hype” then the price is about right.
- danielmarkbruce 6y agoIt's not e.
- danielmarkbruce 6y agoYou aren't the only one. That being said, the markets they play in will probably end up bigger than you might expect. Plus, the competition is pretty bad. Stripe has a good number of people who have 20 iq points + more ambition when compared to the equivalent person working at a competitor.
- EvilEy3 6y ago> Stripe has a good number of people who have 20 iq points + more ambition when compared to the equivalent person working at a competitor. Lmao. Is that some kind of Poe's Law? Can't believe someone would say anything like this seriously.
- danielmarkbruce 6y agoI meant it seriously. Stripe is a payments company - it's not super exciting stuff. With few exceptions the competition are legacy providers which don't attract extremely smart, ambitious people. Just as some examples: Stripe have a good number of formerly high ranking google folks on the engineering side, a good number of former Goldman people etc on the finance side, and the Collisons are freakishly smart guys, especially for their age.
- forrestthewoods 6y agoI really really wish I could invest in Stripe as a retail investor :(
- AlchemistCamp 6y agoSadly, the US locks out all but the wealthiest decile or so from the best investment opportunities. The huge exception this past decade has been crypto.
- redgrange 6y agoI hope stripe allows early adopters to get in on their ipo whenever that happens
- AlchemistCamp 6y agoWell, I guess the crazy correlation between initial server-side tech choice and valuation has just gotten a lot crazier: https://twitter.com/logicmason/status/1371255029412233218 https://twitter.com/logicmason/status/1371255029412233218 Edit: Based on the published data I can find, Stripe and Coinbase alone have added more to their valuations in the last year than the total valuation of the top 50 YC-funded startups including Stripe and Coinbase was last year.
- karimf 6y agoHow doable is it to compile the data from all startups instead of just from YC? I feel like this data should be one of the most important aspect of choosing a tech stack. Even though it’s hard to infer the data because there’s years of delay between inital tech stack choice and the success of the startup.
- myroon5 6y agoWould be interested in accounting for startup age. Wouldn't be surprised if the Ruby companies are older on average
- pythonaut_16 6y agoWould also expect the numbers to even out somewhat if you normalize for the number of startups choosing a language e.g. Ruby
- travisjungroth 6y agoAirbnb and Stripe are both W09 and S09, respectively. Brian Armstrong worked at Airbnb before cofounding Coinbase, which was S12.
- kelp 6y agoNot a YC company, but Square was also founded on Ruby. There was a pretty large monolithic Rails app that AFIK, may still exist. Though we hired a bunch of people from Google, who brought Java, and we went hard towards SOA. Around 2013 there was a Java vs Ruby war in engineering, with many upset people. It ended in peaceful coexistence. But most things in the main payment flow ended up Java.
- e_commerce 6y agoThey'll go bankrupt if they continue to keep fees high.
- BryanBeshore 6y agoHow much wealth creation - to people with access only in the public markets - could this company have created if it were publicly traded? The previous generation had great wealth building ability in being able to invest in companies that were growing rapidly in the public markets at a very early stage (think MSFT, INTC, etc.); today too much of this is done in a way that the vast majority of people cannot be part of. There is a complete disconnect between regulations in the public and private markets. Regulations that make great companies like Stripe pause on going public need to be reassessed.
- benja123 6y agoSuper happy for the Stripe team. They deserve this. I have worked in payments for over 10 years and I can tell you Stripe changed the game, made payments better and made it accessible to all. Before Stripe payment processing was a nightmare. Payment processors had overly complicated APIs and poor documentation(if at all). The fee structures were intentionally not clear and plenty of them had minimum processing amounts and/or monthly fees which made payments processing (outside of PayPal) inaccessible to companies or individuals that lacked capital. Stripe fixed the sh*t show that was payments by creating a really good payments API with clear documentation and a fee structure that was clear and affordable for even the smallest of companies. Next Stripe created Atlas. Now let me tell you something, as someone that does not live in the US, but had a startup, this was huge. When I had a startup, and was looking for a local payment processor that could process in the US, they wanted to charge me thousands of dollars just to get started and that is when I personally knew a large chunk of their senior management. Atlas (which I have never been a customer of) made the opening of a company in the US easy a which gives me and countless others access to Stripe, an affordable high quality payment processor. And I can go on and on about the other things Stripe has done to make payments and finance on the internet better (connect, capital etc.). Watching the Stripe rocket ship from a far has been amazing. They are changing payments and finance and I look forward to seeing them continue to innovate and push the limits of what can be done. Congrats Patrick, John and the Stripe team.
- blizkreeg 6y agoWhy aren’t companies going public sooner now? So much of the medium term upside is gone by the time they IPO and the stock then gets hammered in the markets.