Stripe’s new funding round values company at $35B • Hacker News Board

Re: Stripe’s new funding round values company at $35B

#21

Post by ashelmire » Thu, Sep 19, 2019, 5:31 PM UTC

pmart123 wrote: post #12

thinkingkong wrote: post #7

Before we start piling on about whether or not its really worth 35B just keep in mind how private companies are valued. Someone paid a lot of money for a chunk of stripe so thats what its “worth”. Personally I think stripe is close to worth - as another commenter put it - half of goldman sachs. The recent launch of loans, credit card issuing, etc are all bets or exercises that put stripe in an incredible position to…

What about Stripe versus Adyen or Square?

Does the existence of other financial firms make Goldman Sachs worth any less? I don't think it does.

We're used to winner-take-all when it comes to these unicorns, but I'm not convinced it will stay that way. With many of these service niches, there's a ton of money to be made and enough needs / feature differentiation for competition.

Re: Stripe’s new funding round values company at $35B

#22

Post by danesparza » Thu, Sep 19, 2019, 5:31 PM UTC

mathattack wrote: post #16

Great company but it’s too hard to infer value from such a small investment.

Not really. Some people infer value without any investment -- only based on P&L and year-over-year growth. (Stripe is consistently making money, after all)

Re: Stripe’s new funding round values company at $35B

#23

Post by tempsy » Thu, Sep 19, 2019, 5:32 PM UTC

babl-yc wrote: post #15

harryh wrote: post #4

Why is Stripe still private?

There's two main incentives to go public: raising money and liquidity. They don't need to tap public markets to raise money. And investors are likely OK holding off on liquidity if the valuation continues to rise. Going public typically requires a significant amount of effort across the company, which can reduce focus on other initiatives key to growing the business.

I'm not sure what Stripe's policy is on selling shares on secondary markets, but another reason is that at some point employees need liquidity too.

Re: Stripe’s new funding round values company at $35B

#24

Post by edwinwee » Thu, Sep 19, 2019, 5:34 PM UTC

warent wrote: post #11

Stripe has made transactions for my SaaS business so painless. I recently learned that I have customers with different currencies and it's not even something I had to consider or account for. Yeah their API is a little bit... bloated for simple needs since they're covering for many different use-cases, but their superb documentation, clean dashboard UX, and relatively low fees really make the value offering huge. Ove…

We do want to optimize for those simple needs. Which parts do you think are bloated? Would love to hear how we can de-bloat. (Feel free to email me at edwin@stripe.com too.)

Re: Stripe’s new funding round values company at $35B

#25

Post by babl-yc » Thu, Sep 19, 2019, 5:36 PM UTC

tempsy wrote: post #23

babl-yc wrote: post #15

Earlier quoted context omitted.

There's two main incentives to go public: raising money and liquidity. They don't need to tap public markets to raise money. And investors are likely OK holding off on liquidity if the valuation continues to rise. Going public typically requires a significant amount of effort across the company, which can reduce focus on other initiatives key to growing the business.

I'm not sure what Stripe's policy is on selling shares on secondary markets, but another reason is that at some point employees need liquidity too.

Definitely. Some companies that have been private for a long time allow their employees to sell a percentage of their stock in these later private rounds.

It's not necessarily the same price you'd get on the public markets, but it can help give employees some liquidity.

Re: Stripe’s new funding round values company at $35B

#26

Post by joshmn » Thu, Sep 19, 2019, 5:37 PM UTC

warent wrote: post #19

Despegar wrote: post #18

Earlier quoted context omitted.

Why is it better than Adyen?

For starters I've never heard of Adyen until just now. So, perhaps better marketing?

It's pretty popular in the Europe and is a Dutch company.

Re: Stripe’s new funding round values company at $35B

#27

Post by whitepoplar » Thu, Sep 19, 2019, 5:38 PM UTC

danesparza wrote: post #17

harryh wrote: post #4

Why is Stripe still private?

Because they are wildly profitable already without outside capital investment. Also: much less paperwork to do.

If they're wildly profitable, why would they need this latest funding round?

Re: Stripe’s new funding round values company at $35B

#28

Post by odiroot » Thu, Sep 19, 2019, 5:40 PM UTC

Despegar wrote: post #18

warent wrote: post #11

Stripe has made transactions for my SaaS business so painless. I recently learned that I have customers with different currencies and it's not even something I had to consider or account for. Yeah their API is a little bit... bloated for simple needs since they're covering for many different use-cases, but their superb documentation, clean dashboard UX, and relatively low fees really make the value offering huge. Ove…

Why is it better than Adyen?

I had the unfortunate opportunity to integrate with Adyen around 2016-2017 and it was super painful. The API didn't make much sense to me and the documentation was hard to navigate and understand. It all looked very rough and rushed to the market.

Granted it was "a long time ago" but I can still remember the pain.

Re: Stripe’s new funding round values company at $35B

#29

Post by tryitnow » Thu, Sep 19, 2019, 5:40 PM UTC

mathattack wrote: post #20

kchoudhu wrote: post #3

Stripe is cool -- I use it every day -- but is it really worth, oh, half a Goldman Sachs? I dunno man.

A couple thoughts on why this isn’t a fair comparison: - Goldman is profitable but the employees extract most of it via compensation. - Goldman has to rewin their business every year. Very little recurring revenue and they are one recession from imploding. - You can’t really compute valuation on a very small investment. It’s not like the entire float is trading, and the small investment (relative to valuation) can ha…

I think your third point supports the OP original point. Stripe probably isn't "really" worth that much now.

EDIT: wanted to mention that my impression is that they're a great company, just not worth $35B.

Re: Stripe’s new funding round values company at $35B

#30

Post by arcticbull » Thu, Sep 19, 2019, 5:40 PM UTC

ashelmire wrote: post #21

pmart123 wrote: post #12

Earlier quoted context omitted.

What about Stripe versus Adyen or Square?

Does the existence of other financial firms make Goldman Sachs worth any less? I don't think it does. We're used to winner-take-all when it comes to these unicorns, but I'm not convinced it will stay that way. With many of these service niches, there's a ton of money to be made and enough needs / feature differentiation for competition.

Not the parent poster but I don't think that's what they were going after. I think they were asking whether the valuation is fair relative to other companies that are operating in a very similar space with similar ambitions. GS is an investment bank. A fairer comparison would be SQ, PayPal, Adyen or First Data.

Square's market cap is $25B today on the public markets with a 2019 estimated net revenue of $4.5B and almost $100B in transaction volume. I don't have any insight into Stripe's numbers, though I'd guess it's probably not 40% more than that? Willing to be surprised of course, it's a great company.

The real question being asked here is: "Is Stripe's valuation likely to hold up when they go public one day?"