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Stripe raises $70M at $3.5B valuation, double that of January

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Re: Stripe raises $70M at $3.5B valuation, double that of January

#11

Post by bachback »

ChuckMcM wrote: post #10
pc86 wrote: post #5

Any idea what they plan on using this money for? Having just raised $80M in January what could they need another $70M for?

Since 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 provid…

IPO 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-a...

Re: Stripe raises $70M at $3.5B valuation, double that of January

#13

Post by keithwinstein »

It 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

Previously on HN: https://news.ycombinator.com/item?id=5798905

Re: Stripe raises $70M at $3.5B valuation, double that of January

#14

Post by ojbyrne »

bachback wrote: post #11
ChuckMcM wrote: post #10

Earlier quoted context omitted.

Since 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 provid…

IPO 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-a...

"PwC also pulled together numbers on 2014’s global tech IPOs in the first nine months, finding that there have been 84 of them, with a total issue size of $43.7 billion. In comparison, there were only 64 last year, totaling $11.4 billion."

http://venturebeat.com/2014/11/04/2014-q3-shows-tech-deals-a...

Re: Stripe raises $70M at $3.5B valuation, double that of January

#17

Post by borat4prez »

In 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.

Re: Stripe raises $70M at $3.5B valuation, double that of January

#19

Post by cpach »

borat4prez wrote: post #17

In 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 ano…

While I have no experience with Stripe, it feels like this is a common phase to go through for nearly every growing company :-/

Re: Stripe raises $70M at $3.5B valuation, double that of January

#20

Post by pc »

borat4prez wrote: post #17

In 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 ano…

I'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.
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