
Stripe Is Now a $20B Company - jonknee
https://www.bloomberg.com/news/articles/2018-09-26/payment-startup-stripe-is-now-a-20-billion-company?srnd=technology-vp
======
aacook
Stripe's awesome. I'm in YC's startup school and used Stripe Atlas to
incorporate. I got an email from Stripe, sharing an opportunity to post your
landing page and get feedback from Stripe's design team. That Friday I got an
awesome teardown from Stripe's design team. The page
([https://nanagram.co](https://nanagram.co)) still has quite a ways to go, but
I incorporated most of their feedback and I'm super happy with it. Another
cool thing — Through the grapevine I found out Patrick mentioned NanaGram at
an all-hands meeting. I sent him a quick email to say thanks for the mention,
not expecting a reply whatsoever, and within a few hours he responded.
Stripe's kind of mind-blowing in their ability to not only build a great
product but also to serve the community and be human.

~~~
kaivi
I love Stripe as well, but one thing keeps me wondering - why do their bank
payouts take so long?

My company is based in Norway, and I see funds arriving a week after they are
marked "on the way to your bank". Money get sent like that every day, but
arrive only after a week from a local bank. I know that local bank transfers
are reconciled multiple times a day, and I can't see why there is a delay.

The money sending frequency setting seems just misleading to me.

~~~
giancarlostoro
US banks (maybe most banks?) are just slow as hell from my experience. I pay
several bills here in the USA from US banks to US banks / credit card
companies and it takes a week for it to fully sync up on both my person bank
account and on the statement balance. But if I were to pay with a debit card I
would see the transaction instantly, though in such case it would say pending
for days and days.

~~~
malloryerik
In some countries domestic bank to bank payments are instant and either free
or very cheap. South Korea where I am is one. Bank transfers take perhaps one
second. International bank-to-bank payments are more of a hassle. There is no
Stripe in Korea yet, though they seem to have success in Japan, the land of
cash-only.

------
superasn
The thing I love most about Stripe is that they have invested quite a lot of
resources in their Atlas program to help people from around the world get a
level playing field.

Before Stripe Atlas there was not a single resource that would allow a non
American to setup a bank account for their company totally virtually without
ever visiting US (i know because I spoke to at least a dozen of different
people and everyone agreed that while they could open a company for me,
opening a bank account was impossible after the patriot law (?) yet somehow
Stripe managed to do it).

So not only they have made great accomplishments in the dev part with their
amazing API they have also made a huge difference in many other aspects too
that only a few know about.

~~~
jczhang
How did Stripe bypass the law here?

~~~
azernik
They didn't. It was all stuff that was technically legal, but required
founders to hire a US lawyer to handle the paperwork for them and to make lots
of micro-decisions about a legal system with which they were unfamiliar.

------
haaen
Stripe is the second most valuable YC company. Total valuation of all
companies that YC funded (more than 1,900) now exceeds 100 billon dollars.

Airbnb has a private valuation of 31 billion. Stripe has a private valuation
of 20 billion. Dropbox has a public valuation (DBX) of 11 billion.

So the two most valuable companies account for about half the total value of
all the YC companies. This is what a power law looks like!

~~~
chadash
And this is why Y Combinator may not be right for your startup. The 100
billion dollars of valuation listed on YC's website may not be up to date, but
it's clear that the top 10% of companies make up the overwhelming majority of
their portfolio. So they go for moonshots. And they also invest in multiple
competitors in the same space in the hopes that one will pan out.

So if you're building the kind of company that might be worth $100 _million_
someday but won't ever be worth $100 _billion_ , VCs and startup incubators
might not be right for you, but just remember that a rejection from them
doesn't necessarily mean you aren't on to something great.

~~~
Liron
Even though the top 99.9th percentile companies account for half of YC's
return, it's possible that the 90th percentile companies nevertheless all
produce a great return, more than sufficient to subsidize the 1-89th
percentile, and YC just aims for that.

~~~
erikpukinskis
Ya just because I make most of my money selling hamburgers doesn’t mean I’m
ignoring my regulars who come in for milkshakes.

------
cloakedarbiter
> Several large new customers have also been listed on Stripe's website this
> week, including Alphabet Inc.’s Google and Uber Technologies Inc.

If Uber is now running payments exclusively through Stripe instead of
Braintree, that is a significant blow. I heard that Uber's payments through
Braintree was a significant portion of Braintree's total revenue, don't recall
the exact number I heard, but it was something on the order of 25% to 40%.

~~~
djajshgsjja
I wouldn’t assume it’s exclusive. At the scale of Uber, it may be worth
keeping both systems running and split usage between the two to negotiate the
best rates.

~~~
dajohnson89
That also has the benefit of system redundancy, in case one goes down.

~~~
zck
"Goes down" could include things like "we're going to increase your pricing by
10 cents per charge". It's a much stronger negotiating position that Uber is
in if they can say "we can switch 100% of our volume to Stripe in a minute by
going to admin.uber.com and flipping a single feature flag".

~~~
adtac
Or even better: "we automatically route traffic to the cheaper option and this
requires no human intervention, so don't even bother"

------
haaen
Some valuation context, although I'm fully aware that Stripe is a private
company and that many of its investors could have investing or striking
privileges.

Stripe: 20 billion. Adyen (stock symbol: ADYEN) 19 billion. Shopify (stock
symbol: SHOP) 17 billion. Square (stock symbol: SQ) 39 billion. Paypal (stock
symbol: PYPL) 107 billion.

Paypal cofounders Elon Musk and Thiel are early Stripe investors.

Former Paypal EVP Keith Rabois is a Stripe investor and was COO of Square.

~~~
toptal
Adyen is actually 23b as the 19b you mentioned is in Euros. It’s also
noteworthy that Stripe has about 1/2 the revenue and the same growth as Adyen,
so it will be interesting to see how this plays out in the public markets
given that they have nearly identical business models.

~~~
haaen
You are right.

Right now, 1 euro is worth about 1.17 dollars.

------
joshmn
I want to love Stripe, and I do wish them well, but I've gotten such weird
feelings about some of their offerings.

On HN and other parts of the internet, representatives go out of their way to
make themselves seem available if you have an issue, or have a problem. But
when you finally do reach out, I haven't found them to be as receptive as they
otherwise portray themselves to be.

Maybe it's miscommunication internally, or maybe it's employees not being
well-equipped. But when you send a thoughtful, well-written message and don't
hear anything back, it makes you wonder if it's just lip service.

Whatever it is, good on them for hitting such a great milestone. I know I'll
never hit $20B in anything except in Zimbabwean dollars.

~~~
edwinwee
(I work at Stripe.) I'm really sorry to hear that...we do want to be available
here any way we can, but something must've went wrong. I'd love to find out.
Could you email me at edwin@stripe.com?

~~~
joshmn
We've spoken Edwin. After our first exchange I didn't hear back from you. The
first exchange was great, and unexpected, and maybe it set the bar a little
too high. If you didn't have an answer, or had a bad answer, saying anything
is better than saying nothing at all.

You unintentionally proved my point. It's not like I'm hiding behind this
username.

I just emailed you and the other relevant parties. Going on the record: Not
expecting to hear back. Just wanted to leave my thoughts in the open.

~~~
tome
I'm looking forward to seeing how this one plays out!

~~~
mistircek
I don't know if there is any RemindMe! bot in HN, but it would definitely be
useful in this scenario.

~~~
joshmn
Crickets so far from patio11, pc, and edwinwee. I wrote a kind and thoughtful
email expressing my grievances and giving them the benefit of the doubt. But
I've heard nothing back. I've even left voicemail.

------
40acres
In 2017 e-commerce accounted for 9% of all retail sales. If I recall
correctly, Amazon is the biggest e-commerce vendor and they are using Stripe.

There are no sure bets in business, but If I had to bet on a private software
company's survival 20-25 years down the road I'd be hard pressed to bet
against Stripe. I also think their leadership is very impressive w/ the
Collision bros at the helm.

~~~
pythonaut_16
I hadn't heard about Amazon using Stripe before.

Here's an article from 2017 talking about it:
[https://www.geekwire.com/2017/amazon-quietly-starts-using-
st...](https://www.geekwire.com/2017/amazon-quietly-starts-using-stripe-
process-e-commerce-transactions/)

~~~
ttul
Amazing. I wonder why? Amazon must have insane deals with the credit cards.
This must be to access some tech that amazon doesn’t want to replicate for
some small slice of its business - maybe on the fraud side.

~~~
mcpherrinm
I bet Amazon is only using Stripe for a small slice of their payments to cover
gaps in their own payments stack. I'm sure it's worth it for them to be able
to take payments at a higher rate than not be able to take payments at all.
That's just a back-end optimization they can handle later.

I don't know what slice that is, but there's plenty of reasons you might go
with a more expensive provider. Maybe they support some piece of technology
you don't (like Apple or Google pay in browsers), or can process for a card
type you can't (like one of the country-specific debit card schemes like
EFTPOS in AU or Interac in CA), or just are set up to process payments in some
country that Amazon doesn't have infrastructure set up yet. A quick google
shows Amazon launched in India and Japan in 2017, so maybe one of those
markets had some quirk they didn't want to bother supporting on their own
until payment volumes got up.

It looks like Amazon and Stripe both launched in India in 2017,
[https://stripe.com/blog/india-private-beta](https://stripe.com/blog/india-
private-beta)

------
AndrewWarner
As a client, I love working with them. I never thought I'd say that about a
payment processor.

I get pitched lower rates by their competitors all the time, but their
software sucks. Giving a refund on Authorize.net feels like I'm being forced
to travel back to the 1990s web.

Stripe's site is intuitive, their rates are good, they integrate easily with
every software I use and their customer service speaks to me like humans.
(Plus they have patio11)

~~~
puranjay
I'm not even a Stripe customer but I still like to visit their site from time
to time for design cues. Of mainstream B2B tech companies, I think Stripe has
some of the best front end design I've ever seen. Everything is gorgeous AND
useful. And despite so many products and pages, you never feel disoriented on
their site

~~~
jkeat
Agreed! The sheer amount of landing pages borrowing from Stripe's wide shadow
button style is a testament to this

------
MarkMc
I must admit I don't really understand Stripe's competitive advantage. When
Uber wants to charge a customer's credit card, their main concern is the
payment processor's commission, isn't it? It seems like the ultimate commodity
business. Why aren't there 10 payment processors all competing to charge
Uber's customer's credit card for a razor-thin fee?

~~~
dasil003
At Uber’s scale, sure, but for smaller companies you have to understand that
before Stripe you needed to get your own merchant account and that meant
dealing with a bank. That’s one. You also had to deal with a payment gateway,
which was pretty horrible before Braintree, and Stripe was another step
function, that’s two. The processors are the middleman, and here there is all
kinds of details and clever ways fees are sliced. Ubers of the world have the
scale to invest in optimizing this but companies smaller than <500 generally
don’t and an integrated solution like Stripe just solves a lot of headaches
even if it more expensive in the end. Having the expertise to even understand
how to optimize payment commissions is non-trivial.

------
Firebrand
So maybe I don’t understand because I’m a dumb-dumb lay person, but what does
Stripe do differently from all the other payment processors that has given its
rise and hype.

Is Stripe popular because its developer friendly? What makes it better than
Apple Pay, PayPal, and Square? Normally, when I shop online, I’m usually given
an option to type my credit card info or use my PayPal account. Where does
Stripe fit into all of this?

~~~
canadapups
For my side project website (see my profile), I started to implement PayPal
and got seriously confused with the documentation and process (I'm not a
professional developer). Mid-process I actually didn't even know if I was even
dealing with PayPal or Braintree anymore. Then magically I received a package
in the mail from Moneris. They shipped me a stack of those carbon-copy paper
credit card slips and machine (that cha-chunk sound)... for my website. This
was like 3 years ago.

I asked my professional dev friend what the heck was going on and he told me
to use Stripe. Never heard of Stripe before that. Friend also told me his
revenue was frozen for weeks/months by PayPal for his projects. A weekend
later, I was done implementing Stripe.

My partner insisted I use PayPal because that's what everyone recognized/used,
but I flat out refused after implementing Stripe.

~~~
Wintereise
> I started to implement PayPal and got seriously confused with the
> documentation and process (I'm not a professional developer)

The feeling is the same for most "professional" developers too. The old XML
API is horrible by modern standards.

They do have a new one though that's less of a pain.

------
dawhizkid
I have heard for years people criticizing the payments industry as a low
margin commodity biz. What has changed? Or they just got it wrong?

~~~
ahstilde
The first principles changed. From Elad Gil in First Round Review:

“In the tech world, particularly after PayPal was sold to eBay, the dogma for
many years was ‘Don't ever do payments, it's too hard and fraud will blow up
and destroy you.’ And during the first internet wave, that was true. It was a
challenge to get the type of data and information you needed to really deal
with fraud at scale,” he says. “But fast forward to today and take a look at
companies such as Stripe and Affirm. It seems that the fraud problems weren’t
as bad as we thought and we’ve since developed systems, processes and data
science tools that just didn’t exist back then. So if you’d applied first
principles thinking five or 10 years ago, asking if those assumptions were
still true and digging into whether it was still too hard, then maybe you
would have come to a very different conclusion about starting a payments
company and gotten ahead of the curve.”

[http://firstround.com/review/future-founders-heres-how-to-
sp...](http://firstround.com/review/future-founders-heres-how-to-spot-and-
build-in-nonobvious-markets/)

~~~
tlb
Also, the fraudsters found the online payments business fairly early on,
before there were a lot of real customers. In the late 90s, many merchants had
as many fraud attempts as actual transactions, and a few fraudsters working
through a box of stolen credit cards could take a small merchant to the
cleaners. Now that online payments are so large, and there is a finite number
of sophisticated fraudsters, fraud as a percentage is lower.

~~~
nostrademons
It makes me wonder if the same dynamic is at work with cryptocurrencies now.
Fraudsters found and adopted them early, because if your goal is to commit
fraud, having a currency not under the control of the banking system is a
pretty critical attribute. But now that the mainstream world is aware of them
and people are actively researching what they might be good for, that may not
hold true forever.

~~~
jonny_eh
The difference is that crypto is only good for fraud. So it'll never move past
this early stage.

~~~
woah
Stunning analysis

------
jorangreef
[https://stripe.com/global](https://stripe.com/global) shows a continent with
no lights on.

Please come to Africa. The lights are on here.

~~~
yomielu
Hey. Fellow African here :)

What part of Africa are you in? Asking because I work at Flutterwave,
flutterwave.com (a payment processing company) and we can definitely help you
to process payments.

------
ocdtrekkie
It's easy to see how, taking a cut off the top of a huge percentage of online
purchases is an insanely nice place to be.

I've personally found myself preferring Stripe-based payments when there are
multiple options (such as PayPal and Amazon pay) as well. Maybe I'm wrong on
this, but I feel like dropping my credit card details into a Stripe window is
more private than connecting to PayPal or Amazon accounts. It feels more like
just swiping a credit card at a store.

------
aczerepinski
Pretty annoying that it’s illegal for me to invest in any of these newish tech
companies.

~~~
gamblor956
It's not illegal for you to invest in Stripe. It's simply illegal for Stripe
to try and _sell_ you their stock. If you happen to have personal connections
to Stripe leadership, and they haven't hit the regulatory shareholder limit
(after which they must start filing disclosures with the SEC), you could
legally buy all the Stripe stock you could afford.

~~~
marvin
Have you seen an example of a regular middle-class person actually doing this?
Because in all the stories I've heard, company leadership just say "no, you
need to be an accredited investor to do that", and that's it.

~~~
gamblor956
Parents and college buddies, mostly. I've never seen anyone who wasn't
personally connected to the founders or VCs be allowed to invest if they
weren't an accredited investor because it's simply not worth the hassle to the
company.

------
bschwindHN
A bit off topic but I'll ask it here anyway - I see Stripe Atlas advertised as
an easy way to start an "Internet Business". What exactly is the definition of
an Internet Business? If I sold a physical product, would I still be able to
set up the company through Stripe Atlas?

~~~
patio11
I work on Stripe Atlas. Your question is answered in a bit more detail here:
[https://stripe.com/docs/atlas#should](https://stripe.com/docs/atlas#should)
(and the answer below that one).

We have a number of product decisions to make about how we do things, so the
design center of Stripe Atlas is Internet companies. If one incorporates e.g.
a Delaware LLC through Stripe Atlas, that’s an LLC. LLCs can e.g. own
apartment buildings. We generally assume you probably won’t use us to form an
LLC to own and operate an apartment building. There is, at present, no plan to
have an Atlas meetup to swap tips on finding great exterminators. But if e.g.
you sell SaaS, we have a lot to say about selling SaaS, and your peers in
Atlas will run businesses similar in character to yours.

Many Stripe Atlas companies sell physical products; most of them are
technically-enabled or sold over the Internet. If we were hypothetically not
able to support a product business, it would not be because it is physical, it
would be for one of the reasons on the link above.

------
sxp62000
So happy to hear. They deserve it! Couldn't remember the name for a second,
but so glad I never have to deal with authorize.net again ... ever!

~~~
byron_fast
I once wrote an OLE control from Authorize.net that used XML in Powerbuilder
to communicate with a Lisp server to do my payments. Stripe is better :)

------
rawoke083600
Please come to South Africa! We need a decent alternative to PayPal for
international payments/subscriptions

------
briga
Stupid question: how does a $245 million dollars bring a company's valuation
from $9 billion to $20 billion?

Last I checked, $245 million =/= $11 billion

~~~
sophiebits
It means a VC paid $245 million to purchase 1.225% (which is $245M divided by
$20B) of Stripe's stock.

~~~
adtac
In transactions, is it typical to just create new stock such that the newly
created stock is 1.225% of the final total? Would the previous investors agree
to diluting their stock like that? Or is it common to sell from a common pool
of stock that's owned by the company (who is that? the CEO? what is the
company if not for the stock distribution?)?

~~~
roel_v
You should read a book on this, it's not something that someone can/will
explain in a one off paragraph comment.

~~~
adtac
Any recommendations? Thanks!

~~~
roel_v
I was assigned several in lae school, they wouldn't be relevant to you. Any
introduction book on corporate structure and corporate governance would do as
a foundation (for your jurisdiction) I would imagine, any specific questions
you would have after that would be answered in the followup material in the
references of such a book.

Business school and law school students have to buy many books on these
topics, and their resale value is low. Any second hand book shop has lots of
them, so does abebooks. It doesn't have to be expensive, it's the time you
have to invest that 'costs' (in the generalized economic sense) the most.

------
progx
$20B and still need funding rounds.

------
neximo64
Now only if it didn’t take 7 days to get your payment processed

~~~
collision
Which country are you in? We're working on speeding up payout times around the
world -- it's something people are (rightly) very sensitive to. If you email
me at john@stripe.com I can look into it for you.

~~~
rawoke083600
Hi John, using this opportunity to ask when you guys coming to South Africa?
We REALLY need some international processing here

------
byron_fast
It would be great if they never go public.

~~~
byron_fast
They are a great example of how an API is all that really matters. Anyone
could have done their biz, but they made a good API.

~~~
gakos
I agree that their API is great, but there's so much more to building a
business - most of all perseverance. Many people can make a good or great API
but very few can execute on the rest.

~~~
byron_fast
Well in this case their API is backed by a connection to credit card
systems... the hard part. The card companies could have done it, but they
needed Stripe to show how obvious it is.

~~~
adventured
The reason Stripe exists is because the card companies couldn't do it. They
were incompetent, unimaginative, lazy, slow, arrogant, etc.

Exactly what you typically see out of entrenched goliaths.

It's the same reason several of them that have tried can't catch up with
Stripe, despite trying for years, despite vast resources, and despite Stripe
showing them how to do it.

It's only in a non-reality-touching theory that the card companies could have
done it (ie if you entirely disregard everything about them and only focus on
resources and then give them attributes they don't possess). In actuality,
they couldn't do it.

Microsoft and Nokia couldn't have produced the iPhone. IBM couldn't have
produced AWS. AOL couldn't have produced Google. Disney couldn't have produced
Netflix. Facebook couldn't have produced Instagram. Xerox couldn't have
produced the Apple II. Sony and Microsoft couldn't have produced Steam. GM and
Ford couldn't have produced the Model S. Boeing and Lockheed couldn't have
produced the Falcon 9. Wyndham and Hilton couldn't have produced Airbnb. The
taxi cartels couldn't have produced Uber or Lyft.

Culture acting as an innovation blockade is the unifying impediment between
them all, not lack of resources or that something was technically too
challenging.

~~~
byron_fast
I agree. What I meant by "could" is it was right in their backyard, as are all
your examples. Their failure is representative of bigco culture.

------
amelius
How much money would it take to duplicate the offerings and marketing of
Stripe.

And shouldn't _that_ be the actual valuation?

~~~
ergothus
And when we have a formula that can express developing a user base and market
trust, particularly in the face of a company that already has it, may be we
will.

Until then, it's not terribly accurate to say "A team of 5 can write it in 6
months, so call it $2 mill valuation after hardware and support" because
spending some money to have the exact product DOESN'T mean you have nor can
get their customers.

~~~
amelius
$2 mil on devs and $1B on marketing should do it.

