
Stripe has raised $150M more at a $9B valuation - eloycoto
http://www.recode.net/2016/11/25/13746264/stripe-9-billion-valuation-150-million-funding-series-d
======
valueprop
Stripe, please, please, invest in a better PayPal alternative. That is:

* let people hold money into their Stripe account instead of transferring to a bank immediately

* let people transfer money from their Stripe balance to any other account's Stripe balance for free (PayPal charges a fee for "cross-border" transactions)

* make it possible for marketplaces to pay their workers through Stripe (PayPal and sometimes Payoneer are the only choices now). Workers can then withdraw to their bank accounts from Stripe balance, or use it to pay directly for other stuff on the web

* have a low commission for merchants, if not free, for payments of goods using Stripe balance

~~~
pfarnsworth
If they hold money in their Stripe account, it would transform Stripe into a
money transmitter. The regulations involved are completely different and
immense and would change Stripe into a different company. Also, the
regulations are different for every state they're in, with different
requirements on the board of directors (like NY state). A lot of the things
they do as a processor right now would be impossible if they turned into a
money transmitter. They would turn into Paypal not because they want to, but
because the regulators would force them. Including everything that's bad about
Paypal.

~~~
danmaz74
> Including everything that's bad about Paypal

Not everything that's bad. A sucky API and UI isn't because of regulations.

------
nodesocket
I'd like to see Stripe go public instead of raising additional VC capital.
They could really spark a series of tech IPOs strengthening tech stocks. I
don't have any insider knowledge (besides my research when working on my
failed startup Charge Control[1]), but I would be shocked if Stripe is not
profitable.

[1] [https://justink.svbtle.com/stripe-put-my-startup-out-of-
busi...](https://justink.svbtle.com/stripe-put-my-startup-out-of-business-
before-i-launched)

~~~
eric-hu
I don't have any insider knowledge either, but I have this impression that you
lose operational efficiency when you go public. For all the heat that VCs get
for pressuring their portfolio companies to grow 10x, it seems like answering
to the public market is even more wasteful.

This is just an impression though, I don't have anything to back it up.

~~~
ryanSrich
So what's the end game though? Investors want their return at some point.

~~~
eric-hu
The end game is that you have a product market fit figured out and then you go
public. Pretty much the opposite of what Twitter did.

------
fluxic
Fun to see the rivalry between Stripe and Square play out. This line though
has me a little puzzled, however:

>"On the flip side, Square is more diversified, generating revenue from non-
payment products such as its Square Capital lending business and Caviar
restaurant-delivery operation."

Isn't Caviar widely known for being a massive money-loser for Square?

[http://www.bizjournals.com/sanfrancisco/blog/techflash/2016/...](http://www.bizjournals.com/sanfrancisco/blog/techflash/2016/10/square-
caviar-uber-grubhub-yelp.html)

~~~
JumpCrisscross
> _Fun to see the rivalry between Stripe and Square play out._

One has a part-time CEO tanking Twitter and the other doesn't. This is not a
rivalry.

------
puranjay
OT but Stripe has some of the most beautiful front-end design I've seen on a
major financial product. All their pages are just so beautiful, yet functional

------
Cyph0n
I would like to start a developer-first payment processor in my country, where
we do not have access to PayPal or Stripe.

What would you guys say is the biggest hurdle to overcome to get off the
ground? Finding a bank to back your transactions? Securing customer card
details and connections? Dealing with fraud? Insurance in case of data breach?
Or none of the above?

Also, what kind of upfront costs would I need to factor in? I've been looking
at local compliance requirements and regulations, and they seem doable (on the
order of $1k USD). I plan on working on this alone, at least initially.

~~~
yazinsai
First off, congrats on taking the initiative. It's one thing to complain about
how much a situation sucks, and another entirely to take it upon yourself to
actually do something about it.

You're partially right. The biggest issue medium to long-term would be getting
a bank to back you. That doesn't have to be a show stopper from day 1 though
(assuming you're willing to assume some personal liability, as you will be in
violation of the ToS of any service provider you use).

It all comes down to your risk appetite. Essentially, you could run your own
API that would wrap Stripe/Braintree's API and kickstart your business that
way. This would require a US entity, but with Stripe's Atlas this is a non-
issue.

This is fine if you're processing $10k or even $100k/mo. It gets icky when you
try to get past that. As volume grows, there's increasing pressure to make
sure that your setup is air-tight, something you can only get by setting up
locally (Visa/Mastercard regulations prohibit cross-border processing so it's
the only 100% legit way forward).

Herein lies the challenge. Banks in the Middle East (which I presume is where
you are targeting) vary greatly in terms of what volume actually deserves
their attention. For some that's $10M/mo. For others it might be less. Once
you've got $100k, and have a strong upward trend, you can start having these
discussions.

In short, you want to start it like you would any other business: by focus on
making something people want. The bank issues can be delayed until after
you've got a decent customer base. Historically, there's a 95% chance that
your company would not survive (startup stats still apply). If you get past
that, hit me up and I can provide more specific advice.

~~~
patio11
_Essentially, you could run your own API that would wrap Stripe /Braintree's
API and kickstart your business that way. This would require a US entity, but
with Stripe's Atlas this is a non-issue._

Disclaimer: I work at Stripe, on Atlas, and I'm writing here because this is
professionally interesting to me.

We probably wouldn't be able to support that business, due to it being an
"aggregator." (It aggregates the charges of other merchants and holds onto the
funds for some period.)

These are strongly discouraged by banking partners, largely for risk reasons.
For example, hypothetically suppose an undercapitalized aggregator was hit by
$10k in credit losses by a fraudulent merchant. (Merchant signs up; runs $10k
in charges; whoops they're all stolen cards; you ask their bank to pull $10k
back but that account has been closed and whomever opened it is out in the
wind.)

That $10k has to come from somewhere. Historically, what ends up happening
distressingly frequently is this causes the aggregator to fail to deliver
money to other merchants. Some of them fail. Their customers charge back their
purchases. This increases financial strain on the aggregator. Eventually, the
aggregator fails; _all_ of their merchants are greatly inconvenienced; some of
them fail; thousands upon thousands of customers are adversely affected. One
or more interested parties look for the nearest deep pockets and say "Hey, you
should have seen this coming. You're the big, sophisticated company here. Make
this long, long line of people whole."

This is why the industry largely doesn't offer credit card processing services
to aggregators and, when it does, wants them to be huge, well-capitalized, and
very sophisticated. The same issue makes it anomalously hard to get processing
capabilities for businesses that you'd assume wouldn't cause problems, like
e.g. travel agents. (One cruise company folds while holding onto customer
funds; dominoes start falling as above; boom there's an $N million credit loss
attributable to a company with revenues in the $100k per year range.)

There are some things which look similar if you squint but are distinguishable
because the business doesn't end up holding funds they're not already entitled
to. For example, Stripe Connect lets a platform split a transaction into the
majority for the merchant and a fee for the platform, without the platform
needing to physically have custody of the merchant's money at any point. That
probably won't work for your use-case, though, since the merchant would have
to be in a country we support.

We're working as fast as we can on bringing the rest of the world online.
Stripe wants to be everywhere. Atlas is one initiative we're working on to
make good on that (and has brought Stripe up to somewhere north of 110
countries with customers in them); we're constantly at work on other
approaches, too.

If any HNer ever has a question about this sort of topic, feel free to email
me -- my HN username @ stripe.com will work. I'm happy to explain things, find
the right person to do so, or see what we can do regarding businesses that are
at the margins. We spend a lot of time on me team and elsewhere in the company
zealously advocating on behalf of our users to banking partners to get their
businesses accepted.

~~~
vsl
I'm curious: FastSpring supports sellers from all over the world as their
customers, despite having no local presence. It's not difficult. Why can't
Stripe? I was waiting for _years_ to be allowed to use it, until MOSS happened
in EU and I no longer care - FastSpring's higher fee is well worth the VAT
offloading they do for me (and Stripe wouldn't because of the different
setup).

------
scurvy
I hope the employees got to sell in this round.

~~~
JumpCrisscross
Stripe is in the same bucket as Airbnb, Uber et al. Transfers, even if
"permitted", are blocked. Because what–are engineers going too sue? /s

~~~
scurvy
That's sad. Back in my day, the last round was always C. After that you either
went public or folded up. The track record of companies that raised a D was so
bad that everyone feared a D out of stigma.

Things might have changed a little now, but probably not much. Companies with
later than C rounds will prove to be poor investments.

------
Steeeve
I have trouble understanding this valuation considering that it just doesn't
seem like a terribly difficult market to jump into. They aren't first to the
table. Is there something that's protecting their market position/ensuring
that it will get better?

~~~
exolymph
Whether the market is easy to jump into doesn't matter. Ecommerce is easy to
jump into, but you don't see anyone threatening Amazon's position, right? It's
all about your ability to execute competitively. Also, payments in particular
is a regulation-heavy industry and PCI compliance is a headache all on its
own.

------
desmondrd
Anyone guess what they will spend the cash on?

Couple plausible options

\- they aren't profitable but have huge transaction volume \- international
growth \- new product development

Thoughts?

------
kimshibal
Paddle has CC, Paypal, and available in my country. Win Win Win.

~~~
csdreamer7
Does Paddle have a Ruby gem for Rails?

------
PerfectElement
Perhaps now they will build an Android app?

------
blahi
I don't mean to hate but why would anyone chose Stripe over Braintree? It
seems the same to me + Paypal which is HUGE.

~~~
thraway2016
Throwaway for obvious reasons. We do approx $5MM of annual business through
Stripe.

#1 reason is lock-in and momentum. Stripe has, bar none, the WORST support of
any company in existence. And they don't care to ever change that, having made
noise about it for years, but expending precisely zero effort on that front.
We would love to move.

But we stay, because we utilize Stripe's card tokenization in order to "store"
repeat customers' payment information without having to deal with PCI-DSS
compliance processes. If we moved, all existing customers "stored" payment
information would, by necessity, go away.

~~~
lentil
> If we moved, all existing customers "stored" payment information would, by
> necessity, go away.

Not necessarily. You should be able transfer the stored card data to another
provider. Many (although not all) payment processors seem to allow this.

    
    
      https://support.stripe.com/questions/what-if-i-decide-to-leave-stripe-can-i-export-card-data

~~~
colinbartlett
I've moved a few businesses off of Stripe and never had any problem. They do
it with PGP keys and go directly to the new provider so I never touch any
info. Worked great.

~~~
kennethologist
You moved them from Stripe to where and why? I'm about to launch a product in
a few months and trying to decide which company to go with. So far Stripe
seems to be most favorable for the development team. But maybe there are some
business things that make Stripe less desirable. Thanks for any insight.

------
gkafkg8y8
Just learned that Alphabet is reusing names. CapitalG was used before:
[http://www.royalgazette.com/article/20140422/NEWS/140429952](http://www.royalgazette.com/article/20140422/NEWS/140429952)

------
untilHellbanned
Seems odd so this means the money making isn't going that well.

