Stripe's Annual Letter Is In

SpaceX launches a massive rocket and the TikTok ban brigade pushes forward

Author

Adam Hardej
March 14, 2024

Tech’s resident philosopher kings - the Collison brothers - are back with their annual letter. They quote Charlie Munger. They tell us they processed $1T. They continue to generally be very thoughtful. Meanwhile, SpaceX launched a massive rocket into space (Starship) and the TikTok ban brigade rolls on.

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Stripes 2023 Annual Letter

“Collectively, the businesses running on Stripe passed the milestone of $1 trillion in total payment volume in 2023, up 25% from the prior year. (US e-commerce, an imperfect but useful comparison, grew 7.6% last year.) At $1 trillion, the output of businesses that run on Stripe sums to roughly 1% of global GDP. (Most Stripe users sell so-called “final” goods, which are those that count toward GDP.) Stripe was robustly cash flow positive in 2023 and expects to be again in 2024.”

Notes on progress and pricing from Adam further down.

SpaceX Launch: Starship’s 3rd Flight Test

“The third flight test aims to build on what we’ve learned from previous flights while attempting a number of ambitious objectives, including the successful ascent burn of both stages, opening and closing Starship’s payload door, a propellant transfer demonstration during the upper stage’s coast phase, the first ever re-light of a Raptor engine while in space, and a controlled reentry of Starship. It will also fly a new trajectory, with Starship targeted to splashdown in the Indian Ocean. This new flight path enables us to attempt new techniques like in-space engine burns while maximizing public safety.”

House passes TikTok bill that could ban app in the U.S., spawning Senate support

“The legislation, approved 352 to 65, is a sweeping bipartisan rebuke of the popular video-sharing app — and an attempt to grapple with allegations that TikTok’s China-based parent, ByteDance, presents national security risks.”

Full Article from the Washington Post

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Letters From The Editor

Misc. (short for miscellaneous)

Thoughts On Stripe

We don’t have a ton of information, but thanks to Notice.co we’ll be able to watch how the price reacts here in the coming months. In short, the Stripe update was healthy. They didn’t share much data in the letter, but the main points were:

  • 25% YoY growth rate (similar to Adyen)

  • They crossed the $1T processing milestone

  • They were profitable in ‘23 and project to be profitable in ‘24

The other interesting chart they shared was their ability to decouple from VC capital:

Startups going live on Stripe continues to increase despite VC funding going down.

This means that even though Stripe does benefit in a big way from the VC ecosystem - they do not move in line with that number. This is great to see considering the flat number we saw in 2022 that could have been a cause for concern and speculation. It seems like the Collisons have been able to steer Stripe through a crazy few years. More than anything, the perception of Stripe’s value seem to hinge around general market sentiment much more than their underlying business which marches forward.

When things were up in 2021 - Stripe was up big. When things were down in 2022/2023 - Stripe was down, but only as much as the market more generally. Looking ahead to 2024, with markets heating up in a similar way to what we saw in 2021 (see memecoins) I expect Stripe to ride the wave up again. Maybe it will end in an IPO this time.

TikTok Trials Poll Results

What should the US gov do about TikTok?

🟩🟩🟩🟩🟩🟩 Ban and/or force them to divest. (23)

🟨🟨🟨⬜️⬜️⬜️ Stay out of it. (12)

🟨⬜️⬜️⬜️⬜️⬜️ Something else. (6)

Nice to see the tide shift here a bit. Felt like tech was more divided on this issue recently. Something worth noting that I read about recently: Just because the initial vote moved quickly doesn’t mean the whole process will. Even if it moves through Senate quickly this whole thing is likely to be drawn out by appeals and TikTok will be able to use their unlimited money to make the process painful as possible.

Talk soon,
Adam

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