To generate this income, they are losing money.
10M USD / month in income for a valuation of 95B USD sounds really insane (even at 50B USD valuation).
This could be the real reason why the employees are not so excited to purchase the shares even at a supposedly deep-discount @ 10B USD.
Two weeks ago, Bloomberg said they process $1T in payment volume and expect to turn a profit this year. https://www.bloomberg.com/news/articles/2023-02-16/stripe-is...
From that, about 1.3% + 5c per tx go to interchange + assessment fees.
This leaves about 1.6% + 25c for the payment processor.
14.3 on 816b is about 1.7% which is consistent.
On 1T, that means about 17b in revenue.
Lets assume they have 7000 employees (i've seen 6000-8000 in searches). As rough estimates, these SFO-based SWEs + knowledge workers cost 1m/yr on average (which includes their total comp, insurance, federal + state taxes, and operating overheads amortized over all employees). So their cost of labor may be around 7-8b/year.
They may have other acquisition and marketing costs, but it means the co can feasibly be earning >8b before taxes, depreciation, amortization, etc.
That number could justify a 80b valuation.
If their current round cap is 55b, then my #s on costs are off, or the multiple has dropped to 6-7. Please debug.
Their revenue is probably more on the order of 5-10b - the vast majority of payments volume is from large customers which negotiate much better rates that 2.9%.
I know they're just barely not profitable, so rev of ~8b, and total OpEx (salaries + AWS + cost of sales, etc) being approximately 8b sounds right to me.
At 8b profit, with normal tech multiples, they would be closer to a 200b company!
> Fiserv is also the owner of First Data, which connects 2 million ATMs through the STAR network.
The plot is thickening...
This is wildly off, even for programmers. (Most knowledge workers are not programmers.) You're also conflating cash expenses with the equity-heavy compensation that makes tech employees expensive.
> Stripe charges 2.9% + 30c per transaction.
This is the baseline product. The resulting analysis is like analyzing Microsoft solely on the basis of Windows volumes and margins. (A great business, but not nearly as good as the real Microsoft!)
I would be surprised if the rest of their product suite (Invoicing, Billing, Radar, Identity, Tax, Capital, etc.) isn't generating a meaningful portion of their revenue (and a larger portion of their profit).
> multiple has dropped
Without high-level visibility into the relative revenue/profit contributions of their various products and their individual growth rates, it's hard to even guess at which numbers are driving investment multiples. Is this business more like Twilio, still trying to break from from the tyranny of COGS, or is it starting to look more like a pure SaaS a la Salesforce?