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Stripe acquires Lemon Squeezy
- th3w3bmast3r 2y agoI am always nervous about acquisition. Only time will tell if this is going to be good or bad.
- com 2y agoBased on prior experience: almost certainly bad.
- fragmede 2y agoWhich experience specific to Stripe is that?
- com 2y agoEvery single product company acquisition, ever.
- wesselbindt 2y agoIt's not specific to stripe, it's acquisitions in general. It's consolidation. It's a move towards monopoly. It's a step away from a competitive market. Even the most hardened capitalist cannot claim with a straight face that this is a good thing.
- the_mitsuhiko 2y ago> Rest assured, we’ll continue delivering the same fantastic product and reliability you’ve come to trust. We’ll be in touch as we work through this process with any updates as they come along. We’re excited about finding the best ways to combine Lemon Squeezy and Stripe. That sounds somewhat promising but not entirely committed.
- declan_roberts 2y agoJust set a 1 year timer.
- th3w3bmast3r 2y agoYup - let's see it in a year.
- pc 2y agoNot a lack of commitment -- we just don't want to pre-announce the specifics.
- ezero 2y agoCan you comment on if LS marketplace is still happening?
- paxys 2y agoIt's a good PR statement, but founders who get acquired have zero authority to make such guarantees. You have a boss now, and they can change their mind whenever they want. They will do what's best for their business and customers, not yours.
- jjeaff 2y agoI would much rather Stripe had bought it than PayPal. I'm still mad that they purchased Braintree and ruined it.
- com 2y agoSame old pattern, M&A’s are normally destructive of the acquired firm’s value, but remove risk from the acquirer that something new and good is active in the market…
- LtWorf 2y agoThey might entirely change everything completely.
- 2y ago
- mgrandl 2y agoYikes
- saltserv 2y ago[dead]
- rvz 2y agoNow that's what I call horizontal integration, i.e. reducing competition.
- deleted 2y ago[deleted]
- th3w3bmast3r 2y agoFacts!
- lolinder 2y agoFrom TFA: > Lemon Squeezy has been processing payments on Stripe since our inception. They're not your competition if you are already their most important supplier.
- mattmaroon 2y agoYeah it’s clearly vertical integration.
- janmo 2y agoAnd now for sure they wont change that supplier. So yes it is suppressing competition.
- mska 2y agoWhat will happen to the Merchant of Record feature now? Hopefully they still keep it. That was the best part of lemon squeezy
- pc 2y agoWe will definitely keep it.
- purple_ferret 2y ago[flagged]
- emadda 2y agoWill the MOR feature be merged into regular Stripe, or will they remain separate?
- HyprMusic 2y agoAlso wondering this. I was planning on making the jump to LS soon but if Stripe will be offering MoR services then I'd rather stay within Stripe's stack. I suspect (hope) Stripe Tax will soon offer a MoR service. I imagine this acquisition is mostly for their tax expertise & perhaps internal tools that do all the hard work behind the scenes.
- rvnx 2y agoIt's in fact the reason people love LemonSqueezy (though it uses Stripe under), due to simplifying a lot the VAT remittance.
- handelaar 2y agoI mean, OK, but by the time it's called VAT in their universe they're already treating you as 'overseas' and your total payment processor fee is pushing 10% because "not in the US" apparently carries a 100% surcharge
- tmanager2021 2y ago
- TechDebtDevin 2y agoThis is depressing.
- jaundicedave 2y agomerchant of record was one of the few things that stripe was missing. i'd be pretty worried if i worked at paddle.
- ezero 2y agoI would actually be less worried. The support at paddle is much better than what I've seen from both stripe and LS. LS had decent support a year ago, but has really dropped off. Moving to stripe makes me excited about their product, but more worried about the support.
- ArturZhdanN 2y agoI agree, it is the only feature paddle has over stripe IMO. While having only monthly payouts, high fee, lower conversion
- seanwilson 2y agoAre there any plans to adjust the extra % fees that get added to international, PayPal, and subscription payments, and payouts? (https://docs.lemonsqueezy.com/help/getting-started/fees https://docs.lemonsqueezy.com/help/getting-started/fees) I found these surprising as I didn't see them mentioned on the pricing page near "Transaction fees ... 5% + 50¢" (https://www.lemonsqueezy.com/pricing https://www.lemonsqueezy.com/pricing).
- vsl 2y agoYes, that was a surprise. It was nice to learn about another MoR offering, but this makes them uncompetitive with Paddle, who uses flat 5% + $0.50.
- Onavo 2y agoYes, Lemon Squeezy was not competitive with Paddle at all. They try to upsell users by offering more "nice to haves" like newsletter builders and ecommerce tools but for most SaaS founders Paddle is a much better deal.
- wilg 2y agoYeah these fees are really weird, and very suspiciously hidden.
- deleted 2y ago[deleted]
- sidcool 2y agoStripe could easily replicate the features that lemon squeezy has. It's not about technology, it's about the clientele, brand and talent
- com 2y agoAnd about Stripes internal inability to deliver on the actual product. Lemon Squeezy is laser focussed - Stripe is not. Smart founders will be looking carefully and observing how Stripe fails to retain clientele and think about creating something that fits the Lemon Squeezy gap in the market.
- purple_ferret 2y agoDid Stripe get spooked by this?: https://www.lemonsqueezy.com/blog/guillermo-rauch-vercel-ceo https://www.lemonsqueezy.com/blog/guillermo-rauch-vercel-ceo
- alberth 2y agoMy guess, it’s not. And probably just a great compliant to their TaxJar acquisition from 2021 (+ entry into Paddles space). https://stripe.com/newsroom/news/taxjar https://stripe.com/newsroom/news/taxjar
- _heimdall 2y agoI'd be a little suprised. No one should take Guillermo's claims on things like performance as an unbiased fact. They do make some very impressive things at Vercel, but G is a salesman first and foremost.
- moralestapia 2y agoI disagree, Guillermo is a (great) developer at heart and spirit. He also happens to have found ways to profit from that.
- _heimdall 2y agoI don't mean to say he isn't a skilled developer at all, I phrased my comment poorly if it read that way. He played a big role in early NextJS development and did great work. My comment was meant as a remark on his public persona, he is very willing to over promise and embelish on how something actually works.
- ilrwbwrkhv 2y ago> Their most recent funding round was a $150m Series D at a whopping $2.5b valuation back in 2021, to give you a sense of the size of the company. How much are they worth now? I can only imagine their valuation has dropped. Does anyone use Vercel beyond free / low plans?
- BoorishBears 2y agoNow I need to find a new payment provider. Stripe has burned too many people with too little remorse to ever risk something as critical as payments on them again.
- mmckelvy 2y agoIs there a version of Lemon Squeezy for SaaS companies?
- leros 2y agoThat's what LemonSqueezy already is. You can setup subscriptions and disable their storefront, then it's perfect for SaaS.
- martinkostov 2y agoFollowing!
- __natty__ 2y agoLemonSqueezy itself or Paddle. Both are merchants of records. At least paddle (maybe LS too) allows reverse invoice which is important for some home grown startup saas as they simplify taxes to single customer (paddle), one invoice and one tax jurisdiction usually.
- nikolay 2y agoAcquires the customers and the team?
- erulabs 2y agoGood to see M&A get back on track -- PC, whom I would trust much more than any living economist, must be somewhat positive about the near future? Congrats to the lemon squeezy team!
- ajkjk 2y agoWhy do you prefer M&A happening?
- marrone12 2y agoIt's nice for start ups to have liquidity events.
- 383toast 2y agoalso nice for customers to have less choice and presumably worse pricing?
- mattboardman 2y agoDevil's advocate: more acquisitions creates more incentive to launch a start-up. More startups create more competition.
- paxys 2y agoIt's not a simple "acquisitions are good" or "acquisitions are bad" discussion. There is an ideal amount of M&A activity in an economy which is more than "no startup ever gets acquired" and less than "every startup is bought out by big tech". In recent years we have been closer to the first extreme, and very few startups have had exits of any kind.
- mattboardman 2y agoArguing good or bad on a single data point is reductive. I'm raising awareness that there is a counter argument for assuming excessive M&As is "bad."
- mbStavola 2y agoMerchant of Record is a cool feature to have-- Stripe Tax works well but the pricing structure is horrible. Paying a flat fee for dedicated tax handling would be considerably better! Now if only we could somehow get MoR for marketplaces...
- gaadd33 2y agoDoes Avalara handle MoR? I know they handle complex taxation in the US for the alcohol industry pretty well but I don't know their other features.
- igeligel_dev 2y agoWe have introduced flat fee pricing recently: https://stripe.com/tax/pricing https://stripe.com/tax/pricing MoR for marketplaces basically means merchant of record for Stripe Connect and you, as the platform, take the tax liability via the MoR functionality automatically for your sellers (connected accounts), right? Mind sending me an email at kevinpeters at stripe dot com? Would love to hear about the use case.
- Silhouette 2y agoMoR has become a definitive advantage at least here in the UK - to the point where I'm not sure any other arrangement currently makes sense for the kind of tech startups we often discuss here on HN. For one thing we have the Making Tax Digital VAT reporting rules as soon as we cross our domestic VAT registration threshold (which is lower than £100k of annualised revenue within the scope of UK VAT so something a high growth startup is going to want to cross pretty quickly). To comply with those rules we need a 100% automated system for transferring VAT records from any services we use to collect payments into our MTD-compliant VAT reporting software. I'm still waiting for anyone to show me an easy and cost-effective way to do that properly with any non-MoR payment service provider. AFAIK none of the PSPs I've ever used has any documentation on how to do this, nor do any of the VAT reporting systems I've used since MTD came in. I'm not sure all of the approved reporting systems have the kind of API available that you'd need to implement this kind of data transfer even with significant programming/integration effort. And that's only the easy case of domestic collection and reporting. Internationally there are several services that will accurately calculate the required tax for you based on whatever rules apply wherever your customer is and whatever they are buying (you hope) but again that's only the relatively easy part. You also need to handle all the registration, tax reporting, possibly specific customer invoicing requirements, and tax remittance obligations everywhere they might apply. Obviously that's completely impractical for any SME that isn't a tax specialist because no business at that scale has lawyers and accountants in every relevant part of the world to advise them and manage those relationships with the local tax authorities. In sensible places there are again thresholds for local sales where you don't have to do anything about tax until you're also doing a significant amount of business there that isn't going to happen overnight but who wants to try to work out everywhere in the world that isn't sensible like that? Merchants of record usually charge pretty hefty fees compared to vanilla payment service providers but they're essentially a combination of automating a lot of pain and an insurance policy. Apparently the global tax system is now sufficiently opaque and risky that the market estimates the compliance overhead to be around 6-7% of all relevant trade worldwide.
- guax 2y agoEasy peasy
- anilshanbhag 2y agoMerchant of record can be really big - the biggest issue today is price. 5% + 50c doesn't make sense if you are selling $5 per month subscriptions. Reduce the price to Stripe pricing + 1%, and this will be the default for everyone!
- saaaaaam 2y agoIt does make sense if and if the following apply: (a) you have touched the brand and trust it over other offerings (b) are tech-literate but semi-technical or non-technical or simply don’t want to do anything more than a couple of clicks implementation (c) you are early enough in your journey that sales and revenue matter more than cost of revenue (d) any of the above originally but you solved those problems and now intertia/tech debt somewhere more urgent. That’s a huge number of aspirational digital product vendors. 5 + 50 vs stripe’s lower direct take (for me 1.5 + 20). I just did a quick calculation on a really basic/modest digital product business. Sell something at €25 and sell €50k - 2000 customers. That’s going to be €7k with LSqz over a year, and with Stripe it’s going to be €1.15k The difference is €16 a day. The business makes you €137 a day. If you spend a day each month sorting out admin and taxes because of stripe direct plus a few days paying a developer (you’re non-technical remember!) then that could easily be a cost of €5500 a year. Total cost including card processing is €6150 and it’s only €850 less than LemonSqueezy. Why would you move? And in particular why would you move sooner than 3 years if you are predicting similar revenue each year.
- Crier1002 2y agothis! im selling a subscription with this pricing model and it’s quite painful to swallow. having that said i really enjoy using lemon as my payment processor
- moneywoes 2y agoAre there no alternatives
- virgildotcodes 2y ago
- deleted 2y ago[deleted]
- l5870uoo9y 2y ago> Nine months after our public launch in 2021, we surpassed $1M in ARR and never looked back. Stripe is buying a lucrative business, but more importantly it is buying the complex knowhow of running an international tax-compliant merchant of record. They can then integrate this into their product. I switched to LemonSqueezy primarily out of concern for EU-wide tax ramifications (EU strikes again). Is there a reason to choose LemonSqueezy over Stripe if you are located in the US? There hasn't been a single VAT-compliance case to my knowledge and the need for MoR is unclear.
- johneth 2y ago> Is there a reason to choose LemonSqueezy over Stripe if you are located in the US? There hasn't been a single VAT-compliance case to my knowledge and the need for MoR is unclear. It's not just the EU that charges VAT (or VAT-like taxes). Most countries (and in the US's case, subregions within) charge some form of sales tax that's a pain to manage yourself if you're not a huge operation. Always good to comply with tax laws (if not for the obviously good moral/ethical reasons, then definitely for legal reasons!)
- l5870uoo9y 2y agoUS states have a minimum threshold of $100,000 and upwards so you can be compliant without having to worry about it until you start making larger revenue. Most startups never reach these generous thresholds in the first place.
- nodamage 2y agoAs I understand it the threshold is usually $100,000 in revenue or 200 transactions (following the Wayfair decision), the latter of which is easily reached...
- drewda 2y agoIn addition to the overall benefits of not having non-compete agreements, California's software startup ecosystem also benefits from not having to deal with charging sales tax when selling SaaS[1][2] [1] https://www.taxjar.com/blog/saas-california-sales-tax https://www.taxjar.com/blog/saas-california-sales-tax [2] https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1502.html https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1502.html
- supportengineer 2y agoInstead of calling Stripe directly, customers call Lemon Squeezy directly - it’s an abstraction layer around the Stripe API. What’s the barrier to entry for starting up a similar business?
- konha 2y ago> What’s the barrier to entry for starting up a similar business? The merchant of record model.
- igeligel_dev 2y agoI am working on Stripe Tax, but do not know Lemon Squeezy so well yet. But something Lemon Squeezy does different are the following: the KYC works different and is more restrictive. One of the differences to Stripe considering we still give you as a merchant the responsibility to be tax-compliant after all (you need to add tax registrations into stripe explicitly). Also think about maybe fraudulent cases, LS must be much more restrictive otherwise their payment provider is blocking them. One thing which is weird about tax is physical presences in some cases. In some countries, you actually might need a representative to file your taxes. Plus you need to learn how to register in those countries and how to file taxes. There are probably more things that you need to look up, but that’s what I remember.
- alberth 2y agoStripe itself, is an abstraction layer onto of payment network and banking APIs. What's the barrier to entry for starting up a similar business?
- mtlynch 2y agoI find this pretty disappointing. There's so little competition in the payments space, and this acquisition means that there's even less. I know LemonSqueezy already relied on Stripe, but before the acquisition, there was still a potential path for them to break that dependency. I tried out LemonSqueezy a bit last year and had a mediocre experience, but it was at least nice to see a payment provider focused on simple, straightforward use cases. Stripe and Paddle have so many different customers and flows that it's hard to use them for simple, standard things. I was hoping to see LemonSqueezy fill that niche, but now Stripe is folding LemonSqueezy into the rest of their complex systems.
- nerder92 2y agoThis company screams “Stripe please buy me” so so much. From branding to the all UVP, it was a fast exit because it was meant to be. Still a massive achievement
- ilrwbwrkhv 2y agoTotally and this is the problem with startup founders of today. Their minds are filled with liquidity and an exit event. Steve Jobs had famously said how pathetic that is. And Zuckerberg, love or hate him, turned down billion dollars. Selling your startup is not a good plan. Make it big, change the world, and swim in money.
- mcmcmc 2y agoOk Scrooge McDuck
- localfirst 2y agoYour comment being downvoted is quite telling of the founders that are joining YC they are looking at quick exits especially in this high interest rate environments and so are the backers Very few entrepreneurs are looking to create companies that will provide its workers with forever jobs It's sad but those few that are grinding it out and creating jobs, helping economies in those countries run proper are the unsung heroes. Time will tell where this American greed will take Americans but so far, its not looking good.
- eropple 2y agoSure--if you're looking to do that, you're probably not taking VC and almost definitely not using YC. VC does then choke out nascent companies in the "mid-sized, actually employs people" space if they think there's the potential for a quick buck, by driving it to zero, but the founders trying to do as you describe aren't anywhere near Y Combinator in the first place.
- ilrwbwrkhv 2y ago
- xena 2y agoI wanted to build something on top of Lemon Squeezy because stripe banned patreon-like services. Are you gonna extend that to Lemon Squeezy?
- paulryanrogers 2y ago> stripe banned patreon-like services When did this happen?
- isbvhodnvemrwvn 2y agoProbably since 'patreon-like' means 'onlyfans-like'.
- xyst 2y agoIt’s scary how big stripe is becoming. Instead of competing just buy up other companies. Might be another company that will require regulatory intervention and break them up (same as when the govt broke up the railroads)
- baq 2y ago> Instead of competing just buy up other companies. Zuck has shown the way.
- ghufran_syed 2y agoAnd before them, Cisco
- input_sh 2y agoAs someone from a country not supported by Stripe, it is annoying how frequently I find some tool that I might want to use, only to discover Stripe's the only payout option.
- wubrr 2y agoOut of curiosity - which country?
- ertucetin 2y agoNow someone can create the new Lemon Squeezy, there will be a gap in the market.
- alberth 2y agoI'm hoping this means Stripe Tax will finally get the capability of actually filing the appropriate paperwork & taxes in the geographies it's required.
- thallavajhula 2y ago>Nine months after our public launch in 2021, we surpassed $1M in ARR and never looked back. >Along the way, we received many acquisition offers and (Series A) term sheets from investors. But despite the allure of these opportunities, we knew that what we had built was truly special and needed the right partner to take it to the next level. Wow. This is quite the smart and ballsy move. Congrats to the team. Looks like y'all knew what you were doing.
- maronato 2y agoIt does feel like being bought by stripe was the plan all along
- localfirst 2y agoI find the whole aspect of having MoR a fear mongering tactic to get you to pay extra transaction fees 99% of SaaS won't reach the MRR needed to justify MoR Of the 1% those breaking through 7 digit MRR can simply hire in house to manage tax remittance and not confuse their customers with invoices labelled with MoR's branding All in all this seems like the fear campaign has worked beautifully for Paddle and Lemonsqueezy but some of us saw right through it and never really felt the need to pay 5%~11% (!!) Looks like Stripe will shut down MoRs one by one
- jen729w 2y agoAs an Australian, I kicked the tyres on a few of these products and quickly realised that I didn’t care. Didn’t care about my supposed tax liability in Saudi Arabia. I think I owe those guys $7. Come and get it. Or in Serbia. Or the EU, more broadly. Or in the province of Saskatchewan. All of which I theoretically owe sales tax. I’m registered for GST in Australia. I live in Australia. I will slavishly follow Australian law and submit my GST on time. The rest of it? For a one-person business? Utterly unfeasible.
- Silhouette 2y agoThe problem with the ostrich argument is always that it works until it doesn't. Governments have talked about more international cooperation on tax reporting and collection forever. One of these days they're going to start including serious measures for these things as a routine part of trade deals or other big agreements. They have increasingly easy targets as so many online sales now go through a relatively small number of payment systems like Paypal and Stripe that are distributed enough that they could effectively be compelled to cooperate with any new reporting obligations. Then it's going to be a case of small businesses selling internationally commit an average of N offences per day somewhere in the world because it's impractical not to so if you're the unlucky one they decide to make an example out of then that's going to really spoil your day. As someone who wants to do the right thing but would also like their business to actually do something useful and not spend 95% of its time doing admin work this is the kind of thing that stops me sleeping well at night. It's also why I've become something of an advocate of MoRs and a critic of basically all other traditional payment service providers. I fear the reckoning is a matter of when and not if and so passing the buck to an organisation that actually has a fighting chance of complying may be the only reasonable survival strategy. Of course then I lie awake worrying about the lack of competition in the MoR space - not helped by today's announcement in all honesty - and the dangers of being so heavily integrated with a specific third party service that can't easily be replaced and yet is critical to the sales process. What a time to be running a business in a world where this kind of international sales should be thriving.
- FractalHQ 2y agoWas nice when we had anti trust laws. This is gonna bite us all so hard as a society in the coming decades.
- arminiusreturns 2y agoThese ISV's are really squeezing the juice out of their customers with those rates aren't they? Even Stripe's rates are horrible, but 500 basis points and 50c/tx is really something... but to be fair ISV's are by definition vertical integrators and have more feature offerings.
- b20000 2y agoselling digital products online… what is new? how did they get to 1MM ARR with all the competition?
- wilg 2y agoCurrently using Paddle, and would love to switch to Stripe. I'm concerned about the additional hidden fees mentioned elsewhere in this thread, as well as lack of B2B invoicing features. Though Paddle's invoicing features are pretty barebones (like you can't easily send someone an estimate/pricing before a purchase, only an invoice after one.)
- deleted 2y ago[deleted]
- nxnfufunezn 2y agoPaddle does offers a way of creating draft invoices, allowing you to work through changes with your customers before issuing them. https://developer.paddle.com/build/invoices/create-issue-invoices https://developer.paddle.com/build/invoices/create-issue-inv...
- pixxel 2y agoCongratulations Orman.
- ewuhic 2y agoSince some other MoR were mentioned here, does anyone have experience with https://fourthwall.com/ https://fourthwall.com/?
- antonellaleo 2y ago[flagged]
- MELEKE 2y ago[dead]
- teresasovinski 2y ago[dead]