Is Stripe expensive, or is Adyen cheap?
Welcome to Cautious Optimism, a newsletter on tech, business, and power.
📈 Trending Up: Housing supply in China (about that account) … US GDP … trade barriers, with +10% tariffs on China and 25% on Mexico and Canada coming next week … German inflation … GPU shortages … standalone AI apps …
Speaking of tariffs, a venture capitalist wrote in concerning the latest, asking if Trump’s moves are some sort of 3D chess or merely expressive of non-economically minded folks with their hands on the levers of power. I paraphrase to protect their writing style, but the answer is people who think that Trump is at least partially a canny negotiator consider his tariff threats merely ways to force hard conversations and drive a winning bargain; those who think that Trump believes what he says he believes, find his views on trade to be about as intelligent as threatening allies while cozying up to dictators.
📉 Trending Down: Non-reasoning AI models? … TFR in Singapore … memestocks Palantir, Tesla, and MicroStrategy …
Quick Hits
Startups are growing faster than ever: It’s not our imagination, or merely a handful of outlier datapoints leading us astry. No, startups really are scaling faster in revenue terms today than in the past. From Stripe’s 2024 letter — more below — this chart took my breath away:
It took leading AI companies that use Stripe 35% less time to reach $5 million worth of annualized revenue. Two years to $5 million ARR (or similar) is quick. Not Lovable quick, but still very, very speedy.
I consider the above chart to be yet another mark against traditional SaaS; who wants to invest in something that is slower to growth and known to be an expensive effort to boot?
Self-Driving accelerates: TechCrunch’s Kirsten Korosec writes that “Waymo is logging more than 200,000 paid robotaxi rides every week, according to Alphabet CEO Sundar Pichai.” That’s up from 150,000 weekly paid rides in October, 2024, and 100,000 back in August.
That’s a doubling in far less than a year, and great news for self-driving. Have you heard of more accidents and issues with Waymo cars during the period when it doubled its paid ride capacity? I haven’t. Hell yeah.
Tesla is moving ahead with its own robotaxi efforts, even if they do feel behind the cue ball for now.
Uber handled 33 million trips per day in Q4 2024. Waymo is still a pipsqueak.
Not Just SpaceX: Rocket Lab is getting hammered in pre-market trading today after its guidance failed to excite investors. But let’s not get too caught up in the future. What did Rocket Lab manage last year?
16 launches of its Electron rocket, up 60% YoY
Enough progress on its Neutron heavier-lifting launch system for a targeted takeoff in the back-half of 2025
$436.2 million in full-year revenue (+78%)
Reduction of its operating cash burn by half (from $98.9 million in 2023 to $48.9 million in 2024)
Pretty cool. Unlike SpaceX, which is still private, Rocket Lab is public, allowing us to monitor the economics of private space launch work. As far as I can see, there’s going to be room in the market for far more than a single launch provider, and you can see Rocket Lab making money in the not-too-distant future when parsing its results. Epic.
What happened to the crypto bump? After Trump won the election, crypto prices enjoyed a time in the sun. Bitcoin raced to record highs, some alts soared, memecoins took flight. Since Trump’s second assumption of the highest office in the nation, however, the mood hasn’t been as ebullient as expected.
Lately, despite the SEC dropping lawsuits like a junior VC drops names, crypto prices have tanked. Bitcoin fell under the $80,000 mark briefly before recovering slightly, though it remains off 18% in the last week and more from its ATH of $108,000. Eth is off 25% in the last week. XRP 24%. Solana? 24%, too.
As a result, the value of bitcoin-tuned shares like Coinbase and MicroStrategy have sold off. Coinbase set a 52 week high of $349.75, and is worth $202.30 this morning in pre-market trading. MicroStrategy, which has bet its future on bitcoin rising in value, is worth $234.00 this morning, down from a 52 week high of $542.99.
The Note: Stripe v. Adyen
Stripes 2024 letter — here — has a lot of fun data, including:
Total Payment Volume (TPV) of $1.4 trillion, +38% YoY (Stripe revenue hinges on TPV, so we can infer a similar growth rate for the company’s top line in 2024)
Profitability in 2024 and expectations of the same in 2025
“Stripe’s Revenue and Finance Automation Suite, with Billing at its core” crossed the $500 million ARR mark
Big wins from its stablecoin strategy — we’re bullish — with the company writing that “Stablecoin transaction volumes more than doubled between Q4 2023 and Q4 2024, and the number of monthly active stablecoin wallets has now reached 40 million.”
All that added up to a company able to put together a secondary transaction for staff at a $91.5 billion valuation. CNBC notes that that figure is close to the company’s peak valuation of $95 billion set by private-market investors. That’s quite the valuation recovery, predicated on impressive results.
But how does Stripe compare to Adyen? Thankfully, as the latter company is public we have a wealth of data from its operations (currency conversions via WolframAlpha):
Revenues of $2.1 billion, up 23% YoY
TPV of $1.35 trillion, up 33% YoY
EBITDA of $1.04 billion
All that for a market cap of €53.5 billion, or a bit more than half of what Stripe is worth. Are we merely seeing the ∆ between being an American company, and one listed in Europe? Probably a little. But more interesting is this analysis from Rex Salisbury of Cambrian VC:
“Adyen is winning on the metrics, but the bull case for STrioe is that they are investing more in the future […] So if you want efficient execution, look at Adyen. If you want a bold vision for the future, Stripe is putting a lot more work there.”
Perhaps! You could even argue that Stripe has more flexibility to invest and innovate because it doesn’t have to answer to quarterly investor reports. But as Sheel Monhot points out, Adyen has 4,300 employees while Stripe has 8,200. I thought that in today’s market, doing more with less was the real test of execution?
Regardless, Stripe is going to go public precisely never, so we’re stuck comparing apples (IFRS-complying results from Adyen) to oranges (private-market partial reporting). Akin to SpaceX and RocketLab, who doesn’t want more public companies?