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BFD Expert Voices - Private Credit

BFD Expert Voices

Stripe is rethinking the way it does business as it seeks to expand the number of Fortune 100 companies its serves, president of product and business Will Gaybrick tells Ryan and Lucinda.

Why it matters: Stripe is best known for its developer-first approach to working with startups but is increasingly shifting its focus to attract more enterprise customers.

State of play: As Stripe seeks larger customers, Gaybrick says the company's product is already in a really good place.

"We have all the card features and payment method coverage and geo coverage and so on," he added.

Yes, but: The company is still learning how to onboard and support enterprise customers.

"One of the things we've learned is that a lot of what we built ... is a lot harder for enterprise users to adopt, because they're already sitting across three or four different [payment] processors," Gaybrick says. 

"We've been historically accustomed to users' adopting us wholesale, but for some products we need to change that," he adds.

Between the lines: Many enterprise customers initially turn to Stripe to help solve some of their hardest problems before expanding their use over time, according to Gaybrick.

He gave the example of Amazon, which began working with Stripe in East Asia before expanding its relationship to serve core markets in North America.

He says Uber works closely with Stripe in places like Japan and recently launched a partnership in which the transportation giant is using its payments stack to facilitate bank payments for rides.

Likewise, Airbnb is using Stripe Link to store user credentials and make payments with one click. It has 100-plus customers processing more than $1 billion on Stripe, he says.

The intrigue: Gaybrick insists Stripe is not abandoning startups, even as its focus shifts to enterprise customers. 

"Our CRO [Mike Clayville], joined us from AWS when their business was founded on startups and built up their enterprise business ... and actually their startup penetration went up as he did that," he says. "So we're continuing to double down on the startups team." 

1 big thing: Stripe's enterprise expansion

Photo illustration of Will Gaybrick with Stripe's logo repeated.

Stripe president of product and business Will Gaybrick. Photo illustration: Axios Visuals. Photo: Stripe.

Stripe is not currently working on products related to FedNow, the highly anticipated instant payments system developed by the Federal Reserve.

Why it's the BFD: News of the Fed-backed payments infrastructure has triggered debate and anxiety over how it will affect the fintech ecosystem.

What's happening: Banks are expected to have direct access to FedNow, slated to launch in July. The ostensibly faster and cheaper network could give banks a leg up in their competition with fintechs.

The Financial Technology Association, which represents fintechs including Stripe and Block, last year called on the Fed to make the network more accessible to fintechs and not just to licensed banks.

Still, some fintechs are seeing opportunity in the new rails, with Fika Ventures TX Zhuo recently arguing that it could boost the amount of fintech innovation around independent contractors.

Yes, but: That entire scenario assumes that FedNow hits scale.

Driving the news: "We're tracking it closely," Gaybrick says, noting the company is not actively working on anything related to FedNow. "I really do think real-time payments are going to be a big deal."

"As I understand FedNow, there isn't yet a mandate, so banks don't have to implement it," he added. "For things to completely change the landscape of payments, you need universal coverage."

If, for instance, only 30% of banks support FedNow, then it's unlikely to become a priority for merchants to adopt the system.

Bottom line: "We're keen to see, as it gets implemented, how enthusiastic banks are," he says, "and if it ends up being something that we believe is actually going to be a lot of value to our users."

Stripe is watching FedNow "closely"

2. The BFD: Stripe waits on FedNow

Illustration of a train car made out of money slowing down

PitchBook analysts expect more M&A in the insurtech space, after the recent $2.6 billion take-private deal of Duck Creek Technologies by Vista Equity Partners. The analyst specifically pointed to Guidewire and OneShield as potential targets.

Walmart-backed One boosts savings rate (Reuters)

One elevated its interest rate to 5% for accounts holding up to $100,000, more than 12 times the national average. Notably, Apple began offering 4.15% on its card in April.

Big banks talk about generative A.I., but balk at the risk (CNBC)

Banks worldwide are testing ways that generative A.I. could speed up various paperwork and coding processes throughout their organizations.

But the use of data — which comes with heavy rules and regulations — has many banks hesitating on diving in headfirst.

3. Credit score

Illustration of a scoreboard with lights that spell out Credit Score

• Freetrade, a U.K.-based stock trading startup backed by L Catterton and Left Lane Capital, is launching a crowdfunding campaign that would value it at £225m, 65% below its last known valuation of £650m. https://axios.link/3qMpbMM

• Paro, a freelance network for finance and accounting professionals, raised a $25m Series C round led by Top Tier Capital Partners. Madrona Venture Group, Revolution Ventures and Sierra Ventures also participated. https://axios.link/3p4tRgh

• Truework, an income and employment verification startup, raised $24m in strategic funding from TransUnion. https://axios.link/3N7cUdh

• Thinksurance, a German insurtech focused on commercial and industrial clients, raised €22m. Viewpoint Ventures and M-Tech Capital led and were joined by Segenia Capital, Eight Roads Ventures and Columbia Lake Partners. https://axios.link/42EcxfJ

• OneVest, a Canadian wealth management startup, raised C$17m in Series A funding. Omers Ventures led, joined by Fin Capital, Pivot Investment Partners, Deloitte Ventures and insiders Luge Capital, Panache Ventures, AAF Management and FJ Labs. www.onevest.com

• Kanastra, a Brazil-based fintech, raised a $13m seed round that was co-led by Valor Capital and Quona Capital. Other investors include QED Investors, Actyus, Collaborative, Crestone, Grão, Endeavor, Clocktower, Latitud and Norte. Creditas, OpenCo, CERC, Guiabolso, Conta Simples and Hasdex also participated. https://kanastra.com.br/en/

• Majority, a digital banking startup for U.S. migrants, raised a $9.75m Series B extension from Valar Ventures and Heartcore Capital. https://axios.link/3N6GDTx

• Collectibles.com, a Mountain View, California-based web3 marketplace, raised $5m in seed funding led by Blockchange Ventures. www.collectibles.com

• BoomFi, a London-based crypto payments startup, raised $3.8m in seed funding led by White Star Capital. Passion Capital, Blockchain Founders Fund, Kraken Ventures, GSR, Aquanow and Mantle Network also participated. https://axios.link/3X67Biz

• Finfra, an Indonesian embedded finance startup, raised $1m in new funding from DSX Ventures, Seedstars International Ventures, Cento Ventures, Fintech Nation, FirstPick, BADideas Fund and Hustle Fund. https://axios.link/3qDvKAZ

• BlackRock made a minority investment with Avaloq, a subsidiary of NEC that offers software to financial institutions. https://axios.link/3p8pvVl

• Ladbrokes-owner Entain (LON:ENT) plans to acquire STS Holdings (WA:STH1), a Poland-based based sports betting operator for £750m ($946m). https://axios.link/42DR9qY

• Discover Bank has launched a $36m fund to support startups working to improve people’s financial health. https://axios.link/3X7K6px

4. Deals!

• Tanya Ziv, a former Currencycloud exec, joined open banking startup Yapily as its new COO. https://axios.link/3CpHt94

• Orit Freedman Weissman joined London-based crypto VC Eden Block as a general partner. She previously spent 20 years as a partner for Goldman Sachs in Israel from the early 1990s until 2014. https://axios.link/3p0I3XM

5. It's personnel

Welcome to Wednesday; we spoke with Stripe's Will Gaybrick and share what we learned below. 

Situational awareness: CFPB Director Rohit Chopra says financial institutions are not working fast enough to combat scams conducted on P2P platforms.

@Lucinda is playing catchup with the Marvel Cinematic Universe.

@Ryan is picking his partner up from the airport.

Thanks to George Moriarty and Rob Reinalda for today's edits.

And thanks to you for reading. Please tell your fintech friends about this newsletter. They can sign up here.

June 14, 2023

1 big thing: Stripe's enterprise expansion