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.
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?"