Stripe launches a credit card – gpgmail


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1. Payments giant Stripe debuts a credit card in its latest step into the financing fray

Following the launch of its money-lending program Stripe Capital, the company is unveiling the Stripe Corporate Card, a Visa card open to businesses incorporated in the United States.

Those businesses can use the card without worrying about interest rates or fees — Stripe’s Cristina Cordova said the company expects to have “fewer problems” with this, particularly because participants will be approved based on their revenue in the Stripe platform.

2. Jack Ma officially retires as Alibaba’s chairman

Ma is handing the role over to the company’s current CEO, Daniel Zhang. The transition was announced a year ago.

3. Watch Apple unveil the new iPhone live right here

The event starts at 10am Pacific!

A customer exits the drive-thru lane at a McDonald’s Corp. fast food restaurant in Shepherdsville, Kentucky, U.S., on Monday, Jan. 14, 2019. Photographer: Luke Sharrett/Bloomberg via Getty Images

4. McDonald’s acquires Apprente to bring voice technology to drive-thrus

The company has already been testing Apprente’s technology in select locations, creating voice-activated drive-thrus (along with robot fryers) that it said will offer “faster, simpler and more accurate order taking.”

5. Facebook tightens policies around self-harm and suicide

Facebook will no longer allow graphic cutting images, which can unintentionally promote or trigger self-harm.

6. Why am I seeing this ad? AI, ML & human error in advertising

Adboy founder Adam Zelcer investigates why he’s being served irrelevant ads. (Extra Crunch membership required.)

7. The CEO of Naspers — one of the world’s most powerful and lowest-flying investment firms — is coming to Disrupt

Naspers CEO Bob van Dijk is joining us to talk about the process of spinning out a new holding company called Prosus NV. We’ll also ask about how the company thinks about new investments, including how it views different sectors and different geographies.


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Payments giant Stripe debuts a credit card in its latest step into the financing fray – gpgmail


Last week, when the popular payments startup Stripe made some waves with its first move into money lending through the launch of Stripe Capital, we reported that the company was also soon going to be launching a credit card. Now, that news is official. Today, the company is doubling down on financing with the launch of corporate cards for business customers.

Announced officially today to coincide with the company’s developer event Stripe Sessions, the Stripe Corporate Card — as the product is officially called — is a Visa that will be open to businesses that are incorporated in the US, although they can operate elsewhere.

Notably, users are expected to pay their balance in full each month, so for now there is no interest rate, or fee, to use the card, with Stripe making its money by way of the interchange fee that comes with every transaction using the card.

“We’re not freezing cards based on late or no payments,” Cristina Cordova, the business lead overseeing the launch, said in an interview. “A pretty common reason for non-payment is that a person switched bank accounts and forgot to update the information. But we think we’ll have fewer problems because we have banking information for accepting revenue, by way of our payments business.”

The move is another major step ahead for Stripe as it continues to diversify its business and bring on more financial products to become a one-stop shop for e-commerce and other companies for all the transactions they might need to make in the course of their lives. It is a little ironic that it’s taken years for credit cards to get added into the mix, considering Stripe’s earliest homepages and marketing efforts were built around the design of a credit card (a reference to taking payments online, not issuing credit, of course).

In any case, the list of products now offered by Stripe is long — longer, you might say, than it takes to incorporate a Stripe service into a developer workflow. In addition to its API-based flagship payments product — which is available as a direct service or, via Stripe Connect, for third parties via marketplaces and other platforms — it offers billing and invoicing, in-person payment services (via Terminal), business analytics, fraud prevention on transactions (Radar), company incorporation (Atlas), and a range of content around business strategy.

Some of these Stripe products are free to use, and some come at a price: the main point for offering them together is to build more engagement and loyalty from customers to keep them from migrating to other services. In that regard, credit cards are a cornerstone of how businesses operate, to handle day-to-day expenses in a more accountable way, and this is an area that is already well-served by others, including startups like Brex but also a plethora of challenger and traditional banks. So as much as anything else, this is a clear move to help stave off competition.

At the same time, it underscores how Stripe is leveraging the huge amount of data that it has amassed about its users and payments on the platform: it’s not just about enabling single services, but about using the byproducts of those services — data — to put fuel into new products.

Today, to underscore its global ambitions in that regard, Stripe is adding some expansions to several of its existing products. For example, it will now allow businesses to make payouts in local currencies in 45 countries (an important detail, for example, for marketplaces and network-based companies like ridesharing businesses).

The credit card product will follow a model similar to that of Stripe Capital. As with the lending product, there is a single bank issuing the credit and the card. Amber Feng, head of financial infrastructure for Stripe, confirmed to me that it is actually the same bank that’s providing the cash behind Stripe Capital. Stripe is still declining to name the bank itself, but hints that we may hear more about it soon, which leads me to wonder what news might be coming next.

(Funding perhaps would make sense? The company has raised a whopping $785 million to date and has a valuation of $22.5 billion at the moment. Given that Stripe has made indications that a public listing is not on the cards soon, that might imply, with the launch of these new financing products, that more capital might be raised soon.)

Also similar to Stripe Capital, the underwriting of the card is based on Stripe data. That is to say, business users are verified and approved based on turnover (revenues) as measured by the Stripe payments platform itself; and in cases where applicants are “pre-revenue”, they can be evaluated based on other data sources. For example, if they have used Stripe Atlas to incorporate their businesses, the paperwork supplied for that is used by Stripe to vet the customer’s suitability for a credit card.  

Notably, the cards will be delivered in the spirit of instant gratification: if you are applying and get approved, you can download a virtual card within minutes to your Apple Wallet as you await the physical card to arrive in the post.

Stripe is big on data in its own business, and it’s bringing some of that into this product with spending controls that can be set by person and by category; real-time expense reporting by way of texts; rewards of 2% back on spending in the business’s most-used categories; and integration with financial software like Quickbooks and Expensify.


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APIs are the next big SaaS wave – gpgmail


While the software revolution started out slowly, over the past few years it’s exploded and the fastest-growing segment to-date has been the shift towards software as a service or SaaS.

SaaS has dramatically lowered the intrinsic total cost of ownership for adopting software, solved scaling challenges and taken away the burden of issues with local hardware. In short, it has allowed a business to focus primarily on just that — its business — while simultaneously reducing the burden of IT operations.

Today, SaaS adoption is increasingly ubiquitous. According to IDG’s 2018 Cloud Computing Survey, 73% of organizations have at least one application or a portion of their computing infrastructure already in the cloud. While this software explosion has created a whole range of downstream impacts, it has also caused software developers to become more and more valuable.

The increasing value of developers has meant that, like traditional SaaS buyers before them, they also better intuit the value of their time and increasingly prefer businesses that can help alleviate the hassles of procurement, integration, management, and operations. Developer needs to address those hassles are specialized.

They are looking to deeply integrate products into their own applications and to do so, they need access to an Application Programming Interface, or API. Best practices for API onboarding include technical documentation, examples, and sandbox environments to test.

APIs tend to also offer metered billing upfront. For these and other reasons, APIs are a distinct subset of SaaS.

For fast-moving developers building on a global-scale, APIs are no longer a stop-gap to the future—they’re a critical part of their strategy. Why would you dedicate precious resources to recreating something in-house that’s done better elsewhere when you can instead focus your efforts on creating a differentiated product?

Thanks to this mindset shift, APIs are on track to create another SaaS-sized impact across all industries and at a much faster pace. By exposing often complex services as simplified code, API-first products are far more extensible, easier for customers to integrate into, and have the ability to foster a greater community around potential use cases.

Graphics courtesy of Accel

Billion-dollar businesses building APIs

Whether you realize it or not, chances are that your favorite consumer and enterprise apps—Uber, Airbnb, PayPal, and countless more—have a number of third-party APIs and developer services running in the background. Just like most modern enterprises have invested in SaaS technologies for all the above reasons, many of today’s multi-billion dollar companies have built their businesses on the backs of these scalable developer services that let them abstract everything from SMS and email to payments, location-based data, search and more.

Simultaneously, the entrepreneurs behind these API-first companies like Twilio, Segment, Scale and many others are building sustainable, independent—and big—businesses.

Valued today at over $22 billion, Stripe is the biggest independent API-first company. Stripe took off because of its initial laser-focus on the developer experience setting up and taking payments. It was even initially known as /dev/payments!

Stripe spent extra time building the right, idiomatic SDKs for each language platform and beautiful documentation. But it wasn’t just those things, they rebuilt an entire business process around being API-first.

Companies using Stripe didn’t need to fill out a PDF and set up a separate merchant account before getting started. Once sign-up was complete, users could immediately test the API with a sandbox and integrate it directly into their application. Even pricing was different.

Stripe chose to simplify pricing dramatically by starting with a single, simple price for all cards and not breaking out cards by type even though the costs for AmEx cards versus Visa can differ. Stripe also did away with a monthly minimum fee that competitors had.

Many competitors used the monthly minimum to offset the high cost of support for new customers who weren’t necessarily processing payments yet. Stripe flipped that on its head. Developers integrate Stripe earlier than they integrated payments before, and while it costs Stripe a lot in setup and support costs, it pays off in brand and loyalty.

Checkr is another excellent example of an API-first company vastly simplifying a massive yet slow-moving industry. Very little had changed over the last few decades in how businesses ran background checks on their employees and contractors, involving manual paperwork and the help of 3rd party services that spent days verifying an individual.

Checkr’s API gives companies immediate access to a variety of disparate verification sources and allows these companies to plug Checkr into their existing on-boarding and HR workflows. It’s used today by more than 10,000 businesses including Uber, Instacart, Zenefits and more.

Like Checkr and Stripe, Plaid provides a similar value prop to applications in need of banking data and connections, abstracting away banking relationships and complexities brought upon by a lack of tech in a category dominated by hundred-year-old banks. Plaid has shown an incredible ramp these past three years, from closing a $12 million Series A in 2015 to reaching a valuation over $2.5 billion this year.

Today the company is fueling an entire generation of financial applications, all on the back of their well-built API.

Screen Shot 2019 09 06 at 10.41.02 AM

Graphics courtesy of Accel

Then and now

Accel’s first API investment was in Braintree, a mobile and web payment systems for e-commerce companies, in 2011. Braintree eventually sold to, and became an integral part of, PayPal as it spun out from eBay and grew to be worth more than $100 billion. Unsurprisingly, it was shortly thereafter that our team decided to it was time to go big on the category. By the end of 2014 we had led the Series As in Segment and Checkr and followed those investments with our first APX conference in 2015.

Plaid, Segment, Auth0, and Checkr had only raised Seed or Series A financings! And we are even more excited and bullish on the space. To convey just how much API-first businesses have grown in such a short period of time, we thought it would be useful perspective to share some metrics over the past five years, which we’ve broken out in the two visuals included above in this article.

While SaaS may have pioneered the idea that the best way to do business isn’t to actually build everything in-house, today we’re seeing APIs amplify this theme. At Accel, we firmly believe that APIs are the next big SaaS wave — having as much if not more impact as its predecessor thanks to developers at today’s fastest-growing startups and their preference for API-first products. We’ve actively continued to invest in the space (in companies like, Scale, mentioned above).

And much like how a robust ecosystem developed around SaaS, we believe that one will continue to develop around APIs. Given the amount of progress that has happened in just a few short years, Accel is hosting our second APX conference to once again bring together this remarkable community and continue to facilitate discussion and innovation.

Screen Shot 2019 09 06 at 10.41.10 AM

Graphics courtesy of Accel


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The 11 best startups from Y Combinator’s S19 Demo Day 1 – gpgmail


Y Combinator, the genesis for many of the companies that have shaped Silicon Valley including Airbnb, PagerDuty and Stripe, has minted another 200 some graduates. Half of those companies made their pitch to investors today during Day 1 of Y Combinator’s Summer 2019 Demo Day event and we’re here to tell you which startups are on the fast-track to the unicorn club.

Eighty-four startups presented (read the full run-through of every company plus some early analysis here) and after chatting with investors, batch founders and of course, debating amongst ourselves, we’ve nailed down the 11 most promising startups to present during Day 1. We’ll be back Tuesday with our second round of top picks.



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SoftBank’s second act – gpgmail


Hello and welcome back to Startups Weekly, a weekend newsletter that dives into the week’s noteworthy startups and venture capital news. Before I jump into today’s topic, let’s catch up a bit. Last week, I noted some challenges plaguing mental health tech startups. Before that, I wrote about Zoom and Superhuman’s PR disasters.

Remember, you can send me tips, suggestions and feedback to kate.clark@Gpgmail.com or on Twitter @KateClarkTweets. If you don’t subscribe to Startups Weekly yet, you can do that here.

Anyway, onto the subject on everyone’s mind this week: SoftBank’s second Vision Fund.

Well into the evening on Thursday, SoftBank announced a target of $108 billion for the Vision Fund 2. Yes, you read that correctly, $108 billion. SoftBank indeed plans to raise even more capital for its sophomore vehicle than it did for the record-breaking debut vision fund of $98 billion, which was majority-backed by the government funds of Saudi Arabia and Abu Dhabi, as well as Apple, Foxconn and several other limited partners.

Its upcoming fund, to which SoftBank itself has committed $38 billion, has attracted investment from the National Investment Corporation of National Bank of Kazakhstan, Apple, Foxconn, Goldman Sachs, Microsoft and more. Microsoft, a new LP for SoftBank, reportedly hopped on board with the Japanese telecom giant as part of a grand scheme to convince the massive fund’s portfolio companies to transition to Microsoft Azure, the company’s cloud platform that competes with Amazon Web Services . Here’s more on that and some analysis from gpgmail editor Jonathan Shieber.

News of the second Vision Fund comes as somewhat of a surprise. We’d heard SoftBank was having some trouble landing commitments for the effort. Why? Well, because SoftBank’s investments have included a wide-range of upstarts, including some uncertain bets. Brandless, a company into which SoftBank injected a lot of money, has struggled in recent months, for example. Wag is said to be going downhill fast. And WeWork, backed with billions from SoftBank, still has a lot to prove.

Here’s everything else we know about The Vision Fund 2:

  • It’s focused on the “AI revolution through investment in market-leading, tech-enabled growth companies.”
  • The full list of investors also includes seven Japanese financial institutions: Mizuho Bank, Sumitomo Mitsui Banking Corporation, MUFG Bank, The Dai-ichi Life Insurance Company, Sumitomo Mitsui Trust Bank, SMBC Nikko Securities and Daiwa Securities Group. Also, international banking services provider Standard Chartered Bank, as well as “major participants from Taiwan.”
  • The $108 billion figure is based on memoranda of understandings (MOUs), or agreements for future investment from the aforementioned entities. That means SoftBank hasn’t yet collected all this capital, aside from the $38 billion it plans to invest itself in the new Vision Fund.
  • Saudi and Abu Dhabi sovereign wealth funds are not listed as investors in the new fund.
  • SoftBank is expected to begin deploying capital fund from Fund 2 immediately, and a first close is expected in two months, per The Financial Times.
  • We’ll keep you updated on the Vision Fund 2’s investments, fundraising efforts and more as we learn about them.

On to other news…

iHeartMedia And WeWork's

IPO Corner

WeWork is planning a September listing

The company made headlines again this week after word slipped it was accelerating its IPO plans and targeting a September listing. We don’t know much about its IPO plans yet as we are still waiting on the co-working business to unveil its S-1 filing. Whether WeWork can match or exceed its current private market valuation of $47 billion is unlikely. I expect it will pull an Uber and struggle, for quite some time, to earn a market cap larger than what VCs imagined it was worth months earlier.

Robinhood had a wild week

The consumer financial app made headlines twice this week. The first time because it raised a whopping $323 million at a $7.6 billion valuation. That is a whole lot of money for a business that just raised a similarly sized monster round one year ago. In fact, it left us wondering, why the hell is Robinhood worth $7.6 billion? Then, in a major security faux pas, the company revealed it has been storing user passwords in plaintext. So, go change your Robinhood password and don’t trust any business to value your security. Sigh.

Another day, another huge fintech round

While we’re on the subject on fintech, gpgmail editor Danny Crichton noted this week the rise of mega-rounds in the fintech space. This week, it was personalized banking app MoneyLion, which raised $100 million at a near unicorn valuation. Last week, it was N26, which raised another $170 million on top of its $300 million round earlier this year. Brex raised another $100 million last month on top of its $125 million Series C from late last year. Meanwhile, companies like payments platform Stripe, savings and investment platform Raisin, traveler lender Uplift, mortgage backers Blend and Better and savings depositor Acorns have also raised massive new rounds this year. Naturally, VC investment in fintech is poised to reach record levels this year, according to PitchBook.

Uber’s changing board

Arianna Huffington, the CEO of Thrive Global, stepped down from Uber’s board of directors this week, a team she had been apart of since 2016. She addressed the news in a tweet, explaining that there were no disagreements between her and the company, rather, she was busy and had other things to focus on. Fair. Benchmark’s Matt Cohler also stepped down from the board this week, which leads us to believe the ride-hailing giant’s advisors are in a period of transition. If you remember, Uber’s first employee and longtime board member Ryan Graves stepped down from the board in May, just after the company’s IPO. 

Startup Capital

Unity, now valued at $6B, raising up to $525M
Bird is raising a Sequoia-led Series D at $2.5B valuation
SMB payroll startup Gusto raises $200M Series D
Elon Musk’s Boring Company snags $120M
a16z values camping business HipCamp at $127M
An inside look at the startup behind Ashton Kutcher’s weird tweets
Dataplor raises $2M to digitize small businesses in Latin America

Extra Crunch

While we’re on the subject of amazing gpgmail #content, it’s probably time for a reminder for all of you to sign up for Extra Crunch. For a low price, you can learn more about the startups and venture capital ecosystem through exclusive deep dives, Q&As, newsletters, resources and recommendations and fundamental startup how-to guides. Here are some of my current favorite EC posts:

  1. What types of startups are the most profitable?
  2. The roles tools play in employee engagement
  3. What to watch for in a VC term sheet

#Equitypod

If you enjoy this newsletter, be sure to check out gpgmail’s venture-focused podcast, Equity. In this week’s episode, available here, Equity co-host Alex Wilhelm, gpgmail editor Danny Crichton and I unpack Robinhood’s valuation and argue about scooter startups. Equity drops every Friday at 6:00 am PT, so subscribe to us on Apple PodcastsOvercast and Spotify.

That’s all, folks.




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