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Stripe raises $70M at $3.5B valuation, double that of January
- downandout 12y agoGood for Stripe. Many companies are receiving frothy valuations in this environment. IMO a small fraction of them have even a remote possibility of growing into those valuations. Stripe is one of those few. Disrupting the payments industry, with its labyrinth of regulatory issues, entrenched gatekeepers and competitors, and massive risk management issues, is a Herculian task. Pc and the rest of his team at Stripe have successfully confronted all of these challenges, and I can't wait to see where things go from here.
- benatkin 12y agoThis article is behind a registration wall.
- deleted 12y ago[deleted]
- cylinder 12y agoIs it ethical to post this?
- andymcsherry 12y agohttp://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=1&ved=0CCAQqQIwAA&url=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F558a64e4-7a17-11e4-9b34-00144feabdc0.html&ei=gBB-VPqZIcXNiALlnIG4Aw&usg=AFQjCNHoebXCa281YVR48D6JWRwg42qgDQ&bvm=bv.80642063,d.cGE http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd...
- pc86 12y agoAny idea what they plan on using this money for? Having just raised $80M in January what could they need another $70M for?
- vlucas 12y agoThe article states: "The company is still sitting on much of what it raised in January, but it wanted to "err on the side of being really well-capitalised" in case markets cool down, Mr Collison said."
- ChuckMcM 12y agoSince we don't know, we can speculate. One, they are expecting that it will become difficult to raise money in the future and they are not yet profitable. That implies they do not see an IPO in their future. Two, they have been doing this a long time and some of their early investors/execs want a bit of liquidity, and since they haven't (or can't) offer shares to the public, they are using a private markets to provide that liquidity. Three, they are planning an IPO and some banker convinced them to do "one more round" in order to fill their coffers with some stock outside the stock they could buy as part of the deal to bring them to market. This is a hedge against a 'soft' IPO like Facebook's where the IPO shares available to the bankers were not able to be sold at a profit given the lack of a 'bump.' The hedge would work by them using that stock to sell into the IPO (at say $5B valuation) and thus 'lock in' their payoff without relying on the stock going up at all at the IPO. Take your pick.
- bachback 12y agoIPO certainly not - it's extremely unattractive in the current regulatory regime (death of the IPO [1]). I wonder what their long-term strategy looks like given their margins can't be very high as a front-end for credit card companies. [1] http://www.vox.com/2014/6/26/5837638/the-ipo-is-dying-marc-andreessen-explains-why http://www.vox.com/2014/6/26/5837638/the-ipo-is-dying-marc-a...
- deleted 12y ago[deleted]
- mahyarm 12y agoAfter the company I worked for raised something like $280mm with a $+1b valuation, I don't think it's that impossible.
- onedev 12y agoI believe mahyarm is talking about Tango.me http://www.crunchbase.com/organization/tango-2 http://www.crunchbase.com/organization/tango-2
- pc 12y ago> It seems impossible that they could raise money like that without some serious legal documents stapled on. The terms were almost identical to our previous rounds. > Also, does this mean Stripe is looking to IPO? Not any time soon!
- ankushio 12y agoPlease don't submit articles which are behind paywalls. Usually ft.com, wsj.com can be accessed freely by using Google Webcache. Here is the link to the cached article : http://webcache.googleusercontent.com/search?q=cache:3i5Cv6tTUvgJ:www.ft.com/cms/s/0/558a64e4-7a17-11e4-9b34-00144feabdc0.html+&cd=1&hl=en&ct=clnk&gl=us#axzz3KlrL4HOY http://webcache.googleusercontent.com/search?q=cache:3i5Cv6t... Edit : You can use cachedpages.com to get links to Google Webcache et al.
- minimax 12y agoPlease don't submit articles which are behind paywalls. I'm pretty sure if that's what the moderators wanted, they could just block wsj.com and ft.com directly. Personally I would rather see more payed content because I think it tends to be of higher quality, especially when it comes to business/finance journalism.
- nhayden 12y agoThe issue is the same information is available from other sources without a paywall and the difference in information or insight is negligible for articles like this.
- keithwinstein 12y agoIt seems churlish to keep pointing this out, but (assuming the investment is consistent with the typical Silicon Valley practice), it is just not true that this investment, or any participant, has now valued the company at $3.5 billion. Stripe has sold the investors a new round of senior preferred shares (again, making assumptions). These shares carry various bells and whistles whose terms we don't know -- but probably include some preference at an unknown rate. The seniority and the bells and whistles make these shares particularly valuable, compared with less-senior preferred shares, not to mention common shares, not to mention something like an authorized stock option that will be issued in-the-money at some future time. The way you would get $3.5 billion (again, making the same assumptions) is by imputing this per-share value to all of the equity units, as well as things like authorized-but-not-yet-issued stock options. That is not sensible. The investors in this round have not acted in a way that suggests they believe the less-privileged shares are worth as much as these new shares, and neither has anybody else. There is no basis for imputing the same value to all equity units (and authorized options, irrespective of strike price). Here is a hypothetical cap table that is consistent with public reports: http://qr.ae/lc0ry http://qr.ae/lc0ry Previously on HN: https://news.ycombinator.com/item?id=5798905 https://news.ycombinator.com/item?id=5798905
- vikramhaer 12y agoAfter reading through the quora article, I agree that different tranches may have different terms. However, if investors are buying 70M shares at $1 each, it implies that they believe a share of the company is worth that much. If the company has 3.5B shares, that's an implied valuation of $3.5B. In that sense, the investment does value the company at $3.5B. Whether that valuation (or a higher or lower one) is realized through a liquidity event is a different matter, and if/ when that happens, the valuation would be specific to that point in time.
- arjunnarayan 12y ago> However, if investors are buying 70M shares at $1 each, it implies that they believe a share of the company is worth that much. Well, you need to unpack what "worth" means in that above sentence. If you're using some kind of probability distribution over expected future outcomes (say, using some present value future discounted cashflow model with a probability distribution of possible future cashflows), you can see that there are all these possible future worlds that Stripe can inhabit. In some of these, Stripe is making lots of money, and so the stock is "worth" a lot. In some of these, Stripe is crashing and burning. In those worlds, common stock is worthless. But the preferred stock isn't as badly off due to the 1x (or higher) liquidation preference, and the other terms. So the expected value of the preferred stock across all these worlds is higher than that of common, and imputing its value over common doesn't quite make sense.
- NDizzle 12y agoHopefully they take some of that money and try processing payments other than credit cards. I really wanted to use them, but I have old school customers who want to pay me with a physical check sometimes.
- pc 12y agoYup, we're working on a number of other payment methods. (We have ACH charges in beta -- let me know if you'd like access. patrick@stripe.com.)
- borat4prez 12y agoIn my experience Stripe has very poor customer service. Hopefully they spend some of this money in that department. Trying to talk back and forth through e-mail because they won't give me a number to call about sales trying to get a lower rate because my volume of sales is greater than $80k+ monthly, waiting 24+ hours on average for a reply and even 72+ hours on one occasion, finally gave up on them and went with another payment processing company. This happened over the past month. Kind of disappointed.
- cpach 12y agoWhile I have no experience with Stripe, it feels like this is a common phase to go through for nearly every growing company :-/
- pc 12y agoI'm very sorry about that! The support team has expanded a lot this year; we're working on it. Feel free to email me directly if I can ever help -- patrick@stripe.com.
- adamio 12y agoDo you plan to offer phone support?
- kawsper 12y agoPlease be more active on IRC. Right now it is a guy called 'markin' that is doing all the support, and he isn't even hired by you. He says he is happy with the t-shirts and stuff that he have received, but it would be nice with a more direct route to actual employees.
- modzilla 12y agoI am building a web app right now and am looking forward to when I can start using Stripe to capture payments. Stripe's design (in terms of both usability and visual appeal) is excellent for a tech company. The API documentation is amazingly easy to read and understand. Also, I love your blog. Best of luck to Stripe!
- zlotty 12y agoWould anyone else stuck with a bunch of subscriptions on Authorize.net like to see Stripe come up with an easy way to transition over? That would be incredible.
- wallyburger 12y agoI think that valuations right now are the tech VC equivalent of penis size. You can structure a deal such that a valuation becomes pretty much anything you want and it is more about bragging rights then anything else.