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

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

#101

> [Chief Product Officer] Mr. Gaybrick and Stripe president John Collison said it had no plans to go public. How's that possible? At this valuation they aren't looking at acquisition, right? VC aren't investing to the tune of $250mm (in this round alone) without an exit strategy, right? What exit strategy if not IPO?

They're not ruling out an IPO in the future. They just don't have plans to do it right now.

I have no plans to buy ice cream, but that doesn't mean I'll never buy ice cream. In fact, it's highly likely I will buy ice cream at some point.

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

#102
post #54

[Stripe cofounder] Thanks to everyone here who took a chance on us in the beginning and shared helpful feedback over the years! How to serve startups/developers more effectively at scale is still the main thrust of our product focus. We've fixed and improved a lot of things since we launched here in 2011, but we also still have a lot of work to do. (Both "obvious things we want to fix" and "new functionality we want…

Wanted to hop in and say thank you for starting Stripe. At my first startup, we had to integrate with an old merchant processor for payments and it was a nightmare. With my current startup, we were able to setup Stripe in the first week of operations and take payments seamlessly without too much hassle. Freeing us up from thinking about how to take payments allows us to focus on our product and building out our compa…

Stripe has a slick API, but their banned merchant categories (anything telecom or networking related) have caused trouble for many potential clients, esp. as Ubiquiti integrated them as their first payment processor.

The distinction between high risk consumer sales & B2B low risk sales is not drawn by Stripe.

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

#103
post #23
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.

Look at the valuation increases: Almost 2x year to year for quite a while. I don't expect most people seeing that kind of valuation increases looking to liquidate any part of their position unless they really can't help it.

If their fundamentals growth slowed to rates resembling the regular market, then sure, but as is, all a company with that growth rate might need is let tenured employees add, say 5% of their equity to the round so they can get a bit of liquidity to keep them quiet.

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

#104

Earlier quoted context omitted.

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 almo…

Exactly. I've really liked Patrick Collison in interviews and I've long admired their API documentation. Square Capital was first to offer loans to SMBs that amortize over the transactions so Stripe isn't the first mover there. Some bigger companies like eBay and Burberry have chosen Adyen as a payment solution and I think Booking uses Braintree? Are there reasons outside of costs to choose Adyen or Braintree over Stripe?

Can Lyft develop their own payment tech because they only transact in the US and Canada, and global transactions are where things get complicated?

I like most things about Stripe, but Shopify is also growing like crazy, has an awesome founder, and provides the only alternative to Amazon right now and is valued at $35B.

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

#105

Earlier quoted context omitted.

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.

Payments traditionally has been very fragmented. I think the biggest winners will continue to be Mastercard and Visa as all of these ancillary services will continue to move payments towards digital both on the consumer and business side. I haven’t used the two products, but is Stripe 50% better than Adyen? Why would I use one versus the other? How easy will it be for Lyft to develop its own payment technology?

> is Stripe 50% better than Adyen?

I don't think "better" matters in current valuations. Nor does comparison to competitors really matter too much to the valuation - what matters are the revenue streams and potential for future earnings. So the number of current clients, and prospective clients, seems more relevant.

> How easy will it be for Lyft to develop its own payment technology?

Depends what you mean here. Any of these large companies are going to have their own merchant accounts (or should) processing payments for them. Stripe needs to either 1) take out the bottom of the market, which is what I thought they are competitors were doing and/or 2) come in cheaper and/or more convenient than maintaining your own payment services and such, which I think they do in some cases.

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

#106
At Producteev, my old start-up, I implemented the payment system using Paypal, omg, it was so hard, and so painful for the following reason: - poor documentation - I never knew how to get an up to date documentation - very slow api and website - very hard to understand the meaning of the undocumented data etc.

Once, my co-founder @Ilan Abehassera sent me a link to an article about Stripe on Techcrunch:

I signed up to Stripe, within minutes I was able to charge my own credit card through a CURL bash call, everything was clear, recurring payment perfectly handled, discount, etc etc. And this was at the very beginning of Stripe. Then I had to come up with why we should quickly switch from Paypal to Stripe.

Anyway, very good memoery, you definitely set the standard for how an API should be designed and I can't thank you enough for that!

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

#107

No way that’s worth as much as Airbnb

What do you mean? They look like they're on a fast path to disrupt like all of banking! The banking industry has to be bigger than the bed and breakfast advertising industry.

Not to mention they are more regulatory compliant, and so likely deal with fewer lawsuits and have to spend less on lobbying.

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

#108
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…

> I recently learned that I have customers with different currencies and it's not even something I had to consider or account for. If your customers are at all price-sensitive, you might want to give this a little more consideration. Banks and payment processors always offer "We handle currency conversion for you! How convenient!", and they pretty much always do it by charging several times the normal conversion fee…

Please charge me in your currency, not my currency.

We did that initially, but you do discover a few downsides fairly quickly.

One is that if you also price in your (the vendor’s) currency, for any sort of recurring subscription or repeat purchase, exchange rates can cause noticeable and possibly surprisingly large changes in what your customers pay from one time to another. Naturally this is viewed favourably by your customer if the rate has moved one way but less so if it went the other.

Another is that not everyone’s cards charge as little as a 1% conversion fee. If you’re charging a typical consumer subscription of say £10 per month from here in the UK, some customers could easily wind up paying several pounds more by the time you add in the percentage and flat fees that some card providers seem to be charging for foreign currency transactions.

And finally, some people have never travelled much abroad and don’t really understand how things like currencies, exchange rates and conversion fees work at all. You’ll get someone who has signed up at £10/month, with the amount and currency clearly displayed at every step of the process, who will then email you to ask why they were charged $14.63 instead of the $10 they agreed to. Sometimes there isn’t much you can do at this point, no matter how much you try to explain that $10 and £10 are not the same, and that their card company has added a hefty surcharge for the conversion, and that this would have been explained in the credit card terms (which they probably never read) and isn’t something you have any control over as the merchant.

It’s a tricky area, because there’s usually nothing in it for a merchant to push a customer who does know what they’re doing and does have good terms into paying via the less favourable currency. On the other hand, if you start to provide explicit options for this sort of thing so each customer can choose for themselves, you risk making your payment process more complicated and losing conversions due to analysis paralysis. As ever, there’s not really a single “right answer” when you’re dealing with customers with very different arrangements on their side that you can’t even detect.

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

#109
post #63

I remember when we launched our Japanese tea service [1]: we wanted to switch to Stripe so badly that I was emailing them at the very least once a month, until we made it in their beta program. I'm not sure the youngest remember what the payment landscape was before Stripe, but it wasn't great. Stripe lifted the whole industry up from mediocrity. Around 10 years ago I had the pleasure of setting up payments with a Fr…

The rates themselves show on your receipts? Are you using some sort of plug-in? Could you forward me a receipt at edwin@stripe.com?

For the conversion itself, we automatically convert from whatever currency you've accepted the payment in, then send it to your JPY bank account. The conversion rate is the average of whatever people are buying and selling the currency at that hour, but some financial institutions add a small markup on top of that along the way.

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

#110

I use STRIPE as my payment Processor for my 1 man shop. They are great. Stupid simple. They even offered me a cash advance. All i need now is for stripe to be my bank to keep all my money in there and pay my business bills from it. One stop shop to run my business, would be great! What would even be more useful to me then lending me money, is if they help me build my v2 and take a slice from my business. Finding engi…

What do you feel like you need if Stripe gives you capital for your future receivables for you to go hire more engineers?

They offered me capital. I'd prefer Stripe engineering in exchange for equity.
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