[HN Gopher] Stripe valuation soars to $95B after latest fundraising
___________________________________________________________________
Stripe valuation soars to $95B after latest fundraising
Author : minimaxir
Score : 56 points
Date : 2021-03-14 21:13 UTC (1 hours ago)
(HTM) web link (www.ft.com)
(TXT) w3m dump (www.ft.com)
| qntty wrote:
| https://archive.is/mraaX
| Taylor_OD wrote:
| Wow. It takes a lot of money to take on the PayPal monster huh?
| Incredible.
| kjrose wrote:
| Well, 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.
| heavyset_go wrote:
| I'm building a non-profit and Stripe fees eat into donations. Are
| there any good Stripe alternatives out there?
| edwinwee wrote:
| Stripe can oftentimes lower fees for nonprofits
| (https://support.stripe.com/questions/fee-discount-for-
| nonpro...). Email nonprofit@stripe.com and CC edwin@stripe.com
| --we'd be happy to chat.
| 1123581321 wrote:
| Are you already getting the non-profit discount from Stripe?
| Any processor will cost you something if you take credit card
| donations.
| ceejayoz wrote:
| The 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...) and Stripe appears to have
| similar (no rates disclosed;
| 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 wrote:
| We 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.
| vmception wrote:
| no. target richer people like the rest of us do.
| bombcar wrote:
| Make it clear where to send checks on your donation page - and
| encourage people to use their bank's bill pay. Usually free to
| them and to you.
| heavyset_go wrote:
| Good idea, thanks.
| missedthecue wrote:
| At the end of the day someone has to pay the interchange fees.
| Cu3PO42 wrote:
| Sure, but not necessarily the ridiculously high ones. You
| could just cap them to a reasonably low percentage. In the EU
| it's 0.3% on credit cards and 0.2% on debit cards.
|
| Edit: This is also reflected in Stripe's pricing. They charge
| EU customers 1.4%+25ct on EU cards and honestly you can go
| lower. Adyen does Interchange++ and 10ct, which if you're not
| a big customer probably works out to around 1%+10ct.
| ianhawes wrote:
| If you email them, they will usually give you a rate of around
| 2.7% for VC/MC and 3.9% for Amex
| ceejayoz wrote:
| Sounds risky; Stripe's standard rate for Amex is 2.9%.
| ianhawes wrote:
| Yes, because according to published information, all Stripe
| Amex transactions are at a loss.
| davej wrote:
| Particularly interesting that the Irish sovereign treasury is co-
| leading this round.
| polote wrote:
| Leading a round of 600M at a 95 valuation, They did not even
| took 1% of the company. Is that still leading ?
| bitcoinGod88 wrote:
| How is stripe not bigger than PP.. i swear few people use pp
| these days
| cecida wrote:
| Stripe 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.
| ffggvv wrote:
| am 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
| sharkweek wrote:
| Throw 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.
| Graffur wrote:
| What is Stripe's moat? It's developer friendly but from my
| experience management will only care about the cost.
| klelatti wrote:
| I just listened to a podcast with Patrick Collison in which he
| listed the ways in which Stripe's market seemed unattractive
| when they started out. Dauntingly complex, highly regulated
| etc.
|
| Anyone looking to compete with Stripe will have the same
| thought process and probably won't bother.
|
| And if they do then they will have to execute as successfully
| as Stripe over an extended period.
|
| Edit: Just to add that the podcast was "The Knowledge Project"
| [1] - just a fascinating conversation.
|
| [1] https://fs.blog/knowledge-project/patrick-collison/
| disiplus wrote:
| sure that was then, but that changed over the years. stripe
| is not cheap, i'm pretty sure if somebody came with the same
| UX many would switch, us including. We are B2B and with
| postpaid so the customers are using Stripe to pay Invoices.
| There are zero charge backs or fraud but still have to pay
| high fees.
| klelatti wrote:
| You'll notice I didn't mention price!
|
| Sure you'd like an identical service to Stripe for a lower
| fee but the moat is that doing what Stripe does isn't easy
| at all. You're paying for that fact.
| manishsharan wrote:
| Think 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.
| Graffur wrote:
| > there is no opportunity for an new entrant into this market
| almost globally?
|
| Why is that? Is it something Stripe achieved over time?
| abalone wrote:
| Low pricing is not a moat.
| 0xy wrote:
| This is totally wrong, considering Stripe has enormous
| negotiating leverage.
|
| My employer never bothers switching to any competitor
| because Stripe match any deal that their competitors
| present to us.
|
| Could you, a single person and $500m of seed funding match
| Stripe's prices? Not without hemorrhaging cash.
|
| One of Amazon's moats is low pricing as well, which can
| only be achieved with eye-watering scale (their margins are
| 0% in some categories, they make it up by delaying payments
| to vendors and pocketing the interest).
| ianhawes wrote:
| Fun fact: I presented Stripe an opportunity to meet or
| beat a proposal by Braintree. They countered with a
| microscopic fee decrease and wanted to lock us into a 2
| year deal.
|
| Not only was the offer from Braintree way better, they
| gave us a better deal on PayPal fees as well.
|
| Stripe's focus on their supplementary offerings, like
| Billing (which used to be effectively free) and Checkout
| show that they're trying to eat more of the transaction
| percentage. Try mentioning PayPal button on a Stripe
| Checkout page and you will be muted from talking in their
| YouTube broadcast.
|
| Overall, I'm bearish on Stripe and look forward to
| shorting them on the public market, whenever that day
| comes.
| klelatti wrote:
| Why? If you have scale and the cost base that enables you
| to sustain the pricing profitably in can be very, very
| difficult for competitors to enter your market.
| buro9 wrote:
| Disagree.
|
| Every ecommerce company and retailer looks at payment fees as
| money left on the table.
|
| The more money Stripe take on, the more they need to return
| to investors, and so the more pressure to make margin. That
| is the opportunity for the future.
|
| I too doubt it would come from a bank, nor from Visa and
| Mastercard... but could another exist? Yes!
|
| If it came from a big player, I'd be looking at Shopify.
| ampdepolymerase wrote:
| Shopify already has a first party processor, but they are
| not available to non-shopify customers.
| masom wrote:
| We use Stripe...
| pxue wrote:
| they 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 wrote:
| Honestly, 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.
| chiefalchemist wrote:
| Moat? The payments market is growing. A lot, to say the least.
| All you need is a small percentage of that and it's still
| significant.
|
| It's like the soft drink market. You don't have to be #1 or #2
| and you can still do quite well.
|
| Stripe might never be on top but it'll print money fairly
| easily for a long time.
| SmellTheGlove wrote:
| Think about how much complexity Stripe abstracts away from you
| as its user. In the US it might seem "simple" in that it's just
| cards, but each network/acquirer behaves differently enough
| that even that isn't easy. Now incorporate payment methods that
| aren't cards -- which are way more popular than cards in other
| parts of the world. Then think about decoupling the payment
| method from the geo. And then decouple the pay-in from the pay-
| out. We're not even talking about their other products at this
| point, and already it's a pretty complex business.
|
| The fact that we can think "what's so hard about that?" is
| declaring Stripe's moat without even knowing you did it.
| polote wrote:
| So 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 wrote:
| valuation should not increase linearly based on revenue. the
| market winner will eventually get the lions share
| sebmellen wrote:
| This 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-21..., but I'm sure there are more lurking. What are
| they?
| beaner wrote:
| Coinbase is still private and is valued at $100 B.
| ThePhysicist wrote:
| Bosch is privately owned and they made 71 BEUR of revenue in
| 2020, so about 180 times bigger than Stripe.
| masom wrote:
| > This certainly makes Stripe the most valuable private startup
| in the world.
|
| Stripe has not been a startup for a while, they've been in
| public operations for about 10 years now and probably power a
| large portion of online purchases.
| DLay wrote:
| Bytedance was valued at $180 billion back in November. I was
| shocked to learn how many products they have besides of
| Douyin/TikTok.
|
| https://techcrunch.com/2020/11/05/tiktoks-parent-company-byt...
| gota wrote:
| Yeah, 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
| nl wrote:
| > 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.
| qeternity wrote:
| Cargill 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 wrote:
| True.
|
| 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%.
| [deleted]
| missedthecue wrote:
| Koch Industries is worth well in excess of $100 billion.
| missedthecue wrote:
| Is 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 wrote:
| Payment 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.
___________________________________________________________________
(page generated 2021-03-14 23:00 UTC)