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Stripe valuation soars to $95B after latest fundraising

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Re: Stripe valuation soars to $95B after latest fundraising

#131

Well, I guess the crazy correlation between initial server-side tech choice and valuation has just gotten a lot crazier: https://twitter.com/logicmason/status/1371255029412233218 Edit: Based on the published data I can find, Stripe and Coinbase alone have added more to their valuations in the last year than the total valuation of the top 50 YC-funded startups including Stripe and Coinbase was last year.

I think that correlation can be somewhat misleading, given that there has got be a strong correlation between timing of when those companies launched and their choice of initial programming languages. I mean, nearly all of the top companies in that list were started in the very late '00s and early '10s time frame, when Ruby (and to a lesser extent Rails) was (a) very well established and (b) known for being a high-pr…

+1 to the timing bias. For a long time Rails was the default choice for startups. A list of companies ordered by valuation will have the top of the list be somewhat biased towards age, so the older companies (that started in the age of Rails) will feature more at the top.

FWIW, Airbnb has moved more and more of its backend tech stack off of Rails and onto the JVM; I'm not sure if that's true of other companies in the list. Since that effort started in... 2013-ish? Airbnb went from single-digit billions in valuation to three digit billions, despite a global pandemic ravaging the travel sector. So it's not as clear cut as that list makes it look! Most of Airbnb's valuation was made during a time when it was actively switching away from being a Ruby/Rails shop, and onto a hybrid-but-dominated-by-JVM (backend) company.

I agree generally that productivity helps differentiate successful software companies from unsuccessful ones (although there are lots of other factors too). I think it's more nuanced though than just the feedback between code change in editor to change reflected in locally running application. I used to work on DevTools at Airbnb, and the Rails app was viewed as much less productive to work in according to internal surveys than Java services, despite not needing to wait for Gradle builds. One reason the Java services felt more productive was because the delta between code change and code running in production was much lower — in part because the type system caught more bugs, so there were fewer rollbacks. The Rails monolith needed massive test coverage to keep it stable, and even then, tests missed bugs that Java's type system — as anemic as it is — caught. (Of course, the Java services had tests too; the advantage was they had both types and tests.) Rollbacks caused more havoc than a little time waiting for a Gradle build. FWIW, there were also small Rails services outside of the Ruby monolith, but those tended to not be particularly popular to work on either — so it wasn't just about services vs monolith. Although not everyone felt this way, overall more folks preferred Java to Ruby once Airbnb hit a certain size, even in terms of productivity. People didn't feel done with their change until it shipped successfully, so faster time-to-see-local-changes but slower time-to-ship-overall due to rollbacks ended up feeling less productive overall — especially as code aged and the original authors moved onto different projects or left the company.

Of course, that's something that matters more once you have a larger team and a larger (and older) codebase. Since the list is about original tech stack rather than current tech stack, maybe in ten years the list will still look biased towards environments that favor fast local changes over anything else — even though that won't necessarily reflect what those companies still use.

(Or maybe newer languages like Go and TypeScript balance time-to-see-local-changes and low-defect-rate well enough that the difference will be less obvious? Go's incredibly fast build times feel almost like a scripting language, and a TypeScript/React setup with Hot Module Reloading makes Rails feel practically sluggish in comparison; maybe this is no longer as much of a tradeoff.)

Re: Stripe valuation soars to $95B after latest fundraising

#132

Earlier quoted context omitted.

Ireland is also a tax haven, but sure, they're benevolently investing in their home country, that's totally what it is.

I always read comments like this as: "Every country with lower corporate tax rates than my own is a tax haven" If a company does business within your borders while your army looks on and the populace waxes lyrical about it being unjust, who is really at fault for that? Do foreign countries not have the right of sovereignty to make their own laws and tax rates?

No. At least not if you're part of a free trade union like europe.

Re: Stripe valuation soars to $95B after latest fundraising

#133
post #54

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.

Ireland is also a tax haven, but sure, they're benevolently investing in their home country, that's totally what it is.

Just as an FYI, every tech company invests in some Irish presence, for the tax benefits.

However, most of them don't put engineering there, and a lot of the leadership is often in London.

That's the context of the post that you replied to, so that you can maybe understand more of the nuances.

Re: Stripe valuation soars to $95B after latest fundraising

#134
post #63

Earlier quoted context omitted.

They never implied anything about motive. Really, why does motive even matter? Opposing motives can meet on the same positive result. It happens all the time with humans; whether it's two friends, or a corporation of 50,000 people, or a nation of 300 million. Your pessimism seems to ignore the fact that this is a good thing regardless.

They were quoted saying the move "cements [their] Irish roots [and] provides enough space to gradually expand our team." It'd be a breath of fresh air if CEO's could just say it like it is. I think more people would trust their brand and be more willing to invest in them. Our inner monologue wouldn't have had to fill in the blank with a possible hidden motive. Addressing the most common reason why companies "move" to…

But the brothers are actually Irish, and seem pretty invested in Ireland. Unlike in the case of almost every other tech CEO, who play up features of Ireland that they don't have experience with.

Like, I am very glad that the Irish government supported these brothers, and very sad that the Irish banks refused to work with them when they tried to start Stripe in Ireland.

Re: Stripe valuation soars to $95B after latest fundraising

#135

Earlier quoted context omitted.

Probably because they are a billion dollar mature company. Every company was a startup at some point but at some point they are a mature company that shouldn’t be called startup anymore. Stripe is certainly one of them.

I don't get it. I follow PG's definition of a startup [1]. I think Stripe still qualifies as one. 1. http://www.paulgraham.com/growth.html

Well its PGs perspective whose opinion is not accepted or valued world wide, Indian government doesn't consider you a startup any more after crossing certain age and revenue. Also a lot of companies will not recognise you as a startup(for offers) after you cross certain threshold. Stripe is far from that threshold.

Re: Stripe valuation soars to $95B after latest fundraising

#136
post #23

Earlier quoted context omitted.

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.

"you could just cap them" = (legislation could be enacted which capped them || banks could agree to reduce them). Neither is especially likely at this point in the US.

I agree banks have very little incentive. I was thinking of legislation, even if the US is unlikely to enact it. I just wanted to point out it's not an inherently unsolvable problem.

Re: Stripe valuation soars to $95B after latest fundraising

#137

Earlier quoted context omitted.

isn't a lot of Stripe's revenue going _through_ VISA? It doesn't seem to me they're replacing them as much as possibly making them more money. I think PayPal should be the better comparison/overtake target, at 290B.

5 years later: Stripe announces B2C bank account offering, with , including an introductory 5% cashback on anything processed through Stripe.

Card networks operate on a completely different set of dynamics than payment processors. You need to convince banks to issue and promote your logo. If you want to become your issuer, you now need to keep credit card debt on your books, not to mention customer acquisition costs in the insane rewards-driven card market.

Re: Stripe valuation soars to $95B after latest fundraising

#138

Earlier quoted context omitted.

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 mo…

But did you switch to Braintree.

Yes I did.

Re: Stripe valuation soars to $95B after latest fundraising

#139

Earlier quoted context omitted.

I always read comments like this as: "Every country with lower corporate tax rates than my own is a tax haven" If a company does business within your borders while your army looks on and the populace waxes lyrical about it being unjust, who is really at fault for that? Do foreign countries not have the right of sovereignty to make their own laws and tax rates?

No. At least not if you're part of a free trade union like europe.

I partially own a company in the EU, the neighbouring countries have different laws and wildly different company tax rates, care to elaborate on your assertive "no" here? Last I looked countries in the EU also set their own tax rates.

Feel free to prove me wrong on that matter, we are in a sub-thread about Ireland being a tax haven if you need a reminder.

Re: Stripe valuation soars to $95B after latest fundraising

#140

Earlier quoted context omitted.

isn't a lot of Stripe's revenue going _through_ VISA? It doesn't seem to me they're replacing them as much as possibly making them more money. I think PayPal should be the better comparison/overtake target, at 290B.

5 years later: Stripe announces B2C bank account offering, with , including an introductory 5% cashback on anything processed through Stripe.

What is Stripe doing that BoA/Chase/Citi/Capital One/US Bank/Wells Fargo isn’t or can’t?

What are the profit margins on consumer banking? It seems like a commodity product, I expect it to be not amazing (compared to tech companies’ profit margins).

Why would giving 5% cash back solve any of Stripe’s problem? Any of the other banks can do the same now, but they obviously don’t think it’s worth it to lose that much money for customer acquisition, especially when switching costs are so low.

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