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Braintree Buys Venmo for $26.2 Million
- ivankirigin 14y agoCongrats Iqram, Kortina, and team!
- kortina 14y agoThanks, Ivan. For those who are wondering, the Venmo apps aren't going away: http://bit.ly/bt-venmo http://bit.ly/bt-venmo
- kortina 14y agoWoops, that's http://bit.ly/venmo-bt http://bit.ly/venmo-bt
- fredsters_s 14y agoInterested in revenue vs exit valuation... Can you say anything about it? The margins must be phenomenally low if the valuation was only 10% of what you process yearly...
- rdl 14y agoIf you process $260mm and charge 0% it's not really fair to view $26mm as a 10% revenue multiplier. (Even for the small part of their business funded by credit cards, there's a $500 per customer lifetime exemption, and 3% minus higher fraud rate and 2-2.5+% CNP processor and interchange still puts their revenue at less than a small team's salary with 100% credit cards, and probably less than $100k/yr revenue on credit cards overall. They're obviously being bought for team, technology, and growth potential; current customers are just traction, not revenue.
- acabal 14y agoThat's nice, but calling Braintree a startup is quite a stretch. (The article doesn't, it's just the HN headline.)
- mmalik 14y agoWhat I love about Venmo is that they took payment processing and aggressively went after a niche - 'spotting' or paying back a friend for cash - tailoring the app to that unique experience. Good job Venmo!
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- tzaman 14y agoIs it just me or is the number kinda low, based on Venmo's success so far (and the financial predictions)?
- SatvikBeri 14y agoThere have been several "pay-your-friends" apps that achieve a lot of success for a while because they're free, then lose all momentum when they start charging. I'm not sure if Venmo is in the same boat, but it seems possible.
- drumdance 14y agoI remember waaaaay back in the day when PayPal was called Confinity and they were doing this for PalmPilot. They pivoted and the rest is history.
- habosa 14y agoVenmo hasn't been very successful thus far. They have a small to mid sized user base and they are currently operating at a loss (no fees on transactions that cost them money), so I think $26m is a pretty good number.
- stephenlambe 14y agoThey're only processing $10M of transactions/month, so even if they were to start charging fees, that wouldn't translate into much revenue. Agree that this is a great exit for the team.
- pbreit 14y agoSeems high to me. Minimal traction in a difficult-to-make-money niche (paying people you know).
- jcampbell1 14y agoTheir pricing is 3% on credit cards, and 0 on everything else. At best they would see 1% margin on credit cards, so $250M at 1%, is $2.5M/year. 10X optimistic projected revenue is a great deal for Venmo, and BrainTree is getting a functioning custodial account system and the team that built it.
- gustaf 14y agoMassive congrats guys! :)
- Hovertruck 14y agoVery glad to see this. Venmo is possibly the most useful app on my phone, and one of my favorite products.
- frankdenbow 14y agoSmart move, Venmo has a pretty solid product. Congrats to their team!
- jmccaffrey 14y agoCongrats! I went to school in Philadelphia, I think Kortina paid for cheesesteaks at a hackathon once..
- kortina 14y agoThat's a tradition--we'll be doing the same at pennapps again in a few weeks.
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