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 build platforms for financial capabilities.
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?"
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.
> Are there reasons outside of costs to choose Adyen or Braintree over Stripe?
IMO costs are the worst reason to pick one of these providers at scale. They're all operating with a very similar cost basis, so you know they can each more or less match eachother, and if you come in with sufficient scale they'll offer custom pricing. Their costs are determined by the payment networks and their ability to mitigate risk and fraud. Stripe got a rep for being willing to match anyone even if they lost money in the process.
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?
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.
Stripe Connect's fee is 2.9% + 30¢ per transaction for all payment methods accepted; plus another fee of $2/user/mo for each active "merchant" on your platform.
Adyen's MarketPay fee varies depending on payment method and is about 1-5% + 12¢ per transaction. I've contacted them to ask what one could expect for MC and Visa, but Amex and Discover are 3.95%, so I imagine similar. No mention of any other fees.
So for smaller dollar transactions (~$5), Adyen appears to be cheaper. Also, they support ACH, which Stripe does not.
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 build platforms for financial capabilities.