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BFD Expert Voices - Private Credit

BFD Expert Voices

Stripe's Eileen O'Mara was promoted to chief revenue officer this year, tasked with leading the payment firm's push to serve enterprise customers.

Yesterday at Money20/20, she sat down with Ryan to discuss her new role, how Stripe is approaching its enterprise opportunity, and how it's experimenting with AI.

This interview has been edited for brevity.

Stripe had a bit of a management change with you moving to CRO and [former CRO] Mike Clayville becoming chief customer officer. Can you explain the change and what you each will do in your new roles?

I'm in my fifth year at Stripe. I joined originally to lead the EMEA business and then progressed from there to the global head of sales role. The move to the CRO role was pretty much a natural progression. That was always the intent and the plan.

We thought it was the right time also to have a chief customer officer role, and Mike is just an amazing executive in so many ways — but particularly with the customer at the center of everything.

From our users' perspective, this is great because you have Mike, who's building out our function and motion around CCO. And I will continue to focus very deeply on the revenue and growth of the organization.

We spoke with [Stripe chief product officer] Will Gaybrick earlier this year, and one of the big messages that he got across was Stripe's shift to enterprise sales and adoption. Where do things stand now?

One reason I was excited to join Stripe [was], here is a company that wants to serve all sizes and segments of users — from your upstarts and startups all the way up to your large enterprises.

We've organized ourselves and have invested to serve enterprise users in a very intentional way across the business in everything we do. From a product development perspective, from a go-to-market perspective, to how I organize my sales organization and support organization.

It's a journey for sure, but we're really happy with the progress that we're making. We have over 100 customers now who do more than $1 billion on the platform annually. So that's a major shift.

How is the enterprise sales process different from Stripe's early focus on startups?

It's super-complex, and the sales cycles obviously can be longer. You're often dealing with the architecture and sometimes dealing with big distributed decision-makers. 

I think what's interesting, though, that we're seeing in the enterprise is that they are being super-disruptive within companies. 

So when you get into it with these large enterprises, there's tons of urgency, and they are absolutely on a path to deliver a fast ROI and impact to the company in a way I haven't seen in my previous roles.

You're best known for payment processing, but can you talk about the growth of other parts of your business? 

Our other pillars are revenue and financial automation, and that's really around billing, subscription management, and tax reconciliation. And I suppose we think really that the back office has been unserved.

200,000 users now on that platform are customers, so it's gained a lot of momentum, and it's a big lever for our investment and our R&D strategies.

Our third pillar is embedded finance or Banking as a Service, and this provides our customers with the opportunity to open a bank account, to offer capital loans to their customers, and to issue cards from a B2B perspective.

That is very complementary to the payment stack and sits in an adjacent way to our payment platform.

The big topic at Money20/20 this year is generative AI and LLMs. How is Stripe using AI?

Well, Stripe has always used AI, and it's always been at the heart of our whole differentiated platform. 

Sigma AI is a new product that users can, using an LLM, just query anything on your financial platform with Stripe. That's super-cool because, within seconds, very complex data is served back to you.

Also, on our developer tools, we're using LLM models and programs to provide [co-pilot like] coding tools.

Then, at a practical level, we're using it to be more efficient internally. A lot of how we're training our sellers and our go-to-market teams is supported through LLM learning.

So we're embedding it throughout everything we're doing, as well as in our customer support services. I would say we've put it in the hands of every [employee].

And our consumers and users are looking to us to see what they could do [with AI] and how they could leverage some of the efficiencies from the platform.

1 big thing: Stripe CRO on new role, AI and more

an illustration of Eileen O'Mara of Stripe surrounded by vertical stripes and digital lights

Photo Illustration: Tiffany Herring/Axios; Photo: Courtesy of Stripe

Folks are making hay out of HayCoin, Axios Crypto's Crystal Kim writes.

Driving the news: The price of the coin traded for more than $3 million recently, making each worth more than a bitcoin.

Yes, but: That's only because a major HayCoin supply holder burned 99.99% of coins on Saturday.

Catch up fast: HayCoin was the inaugural coin of an earlier version of the decentralized protocol Uniswap, of which CEO Hayden Adams owned the majority.

A swath of tokens from the project was destroyed then, and the remaining were destroyed recently after some degens started to conjure a market for the tokens.

What they're saying: "Ultimately, I'm uncomfortable owning almost the entire supply (~99.99%) of a token that people are memeing and speculating on, so I decided to burn the full amount in my wallet ("valued" at an absurd ~$650b)," Adams said Saturday on social media.

Be smart: Coin prices are a function of supply and demand, and burning tokens effectively wipes them permanently from the market, thus boosting the price of the remaining tokens.

HayCoin is mainly just an idea. It's a token spun up by and then denounced by a crypto luminary. In that way, it's the latest meme coin.

2. The BFD: Goodbye, Hay supply

A closely watched jury trial underway in Kansas City, Missouri, could upend a contentious cornerstone of the U.S. real estate market — broker fees, Axios' Emily Peck writes.

Why it matters: The case, one of two antitrust class-action suits filed against the largest brokers in the country and the National Association of Realtors (NAR), could shake the powerful trade group's stronghold on the industry — and change how Americans buy houses.

Already, two defendants, Anywhere Realty and Re/Max, settled both suits — scaling back their relationship with the NAR and paying a total of $139 million in damages.

The Department of Justice is also reportedly weighing antitrust action against NAR, according to Bloomberg.

At issue: Broker fees, specifically the seller's payment to the buyer's agent, are at the heart of the case.

Under NAR rules, which agents must follow to gain access to most local real estate databases, the seller pays the fee, which gets split between the seller's real estate agent and the buyer's.

In these listings, sellers are required to include a fee offer (even if it's zero) — which is visible to buyers' agents, but not usually visible to the prospective buyers themselves.

The plaintiffs, who represent the sellers of more than 260,000 homes in Missouri, Kansas and Illinois, argue that the system is effectively a conspiracy that keeps home prices artificially inflated.

By the numbers: In 2020, Americans paid over $85 billion in residential real estate commissions, the DOJ wrote as part of a prior antitrust investigation.

Though the NAR has recently said the fee could be as low as $0, research has found the fees tend to remain overwhelmingly uniform.

The commission system amounts to "collusion," the lead plaintiff attorney in the Missouri case told Bloomberg.

Zoom out: For decades, critics have called out NAR and this system for inflating home prices — and misaligning the goals of the buyer and their agent.

After all, agents get paid more if the buyer pays more.

"The industry, from a consumer point of view, doesn't make much sense," said Steve Brobeck, a senior fellow at the Consumer Federation of America who's long worked on this issue.

For the same amount of money many folks pay in broker's fees, you could buy a car, he points out. The broker fee on a $500,000 house, would be $30,000. "It's nuts."

The big picture: The internet has disrupted just about every marketplace in the country, typically making things cheaper — you can trade stocks for no fee, for example.

And yes, the process of homebuying has been changed by the internet: Homebuyers now scope out listings online and might not even contact a broker until they know specifically which home they want.

But even after online listings really took off in the mid-aughts, fees are about the same — about 5% on average, according to data from Housing Wire.

The other side: In an email to Axios, a representative from the NAR said its rules and system benefit consumers and the market. They note that "compensation is always negotiable" and that commissions fluctuate depending on the market.

Changing its rules "would jeopardize consumers' equal access to homes for sale, affordability, and the stability of the entire housing market," the trade group argues.

Changing the structure of fees could make it harder for cash-strapped buyers to afford homes, they argue, citing a paper co-authored by a George Washington University business school professor and fellow at the Urban Institute.

Reality check: The NAR's dominance has proved incredibly difficult to shake. Even if it loses these trials and is forced to pay up, it's not clear that meaningful structural change would follow.

Advocates are calling for decoupling — with buyers paying their agents directly, and possibly including that fee in the financing of the home.

What's next: The trial is expected to end early next month.

3. Lawsuits could upend real estate market


Illustration of a set of keys with a percent sign keychain

🌊 Fintech reckoning is rippling through Coastal Community Bank (The Information) 

It's the latest example of how a government crackdown is sweeping across banks that binged on fintech partnerships as a way to fuel customer growth, Michael Roddan writes.

💳 Metropolitan Commercial Bank fined $14.5m over prepaid card program (FintechFutures)

The Fed issued fined New York's Metropolitan Commercial Bank $14.5 million over alleged violations of customer identification rules. The board said it received "multiple reports indicating widespread fraud" over its prepaid card program.

💸 LBO checks top 50% for the first time (Axios)

Private equity funds are ponying up more of their own cash this year than ever before to fund their deals — and using less debt.

4. Credit score

Illustration of a dart in the bullseye of a dartboard that says "credit score."

• Aleph, a New York-based financial data repository, raised $16.7m. Bain Capital Ventures led and was joined by insiders YC, Khosla Ventures and Picus Capital. www.getalpeh.com

• Tenary, a San Francisco-based cloud spend management platform, raised $12m in Series A funding. Jump Capital led and was joined by Fin Capital, RiverPark Ventures, Great Oaks Venture Capital and Gaingels. https://axios.link/46NmPxi

• Laka, a French e-bike insurer, raised €7.6m. Shift4Good led, joined by insiders Ponooc, Autotech Ventures, ABN AMRO Ventures, Porsche Ventures, Creandum, 1818 Ventures, Seedrs and Elkstone Partners. https://axios.link/3SanbJA

• Finerio Connect, a Mexico City-based open finance startup, raised $6.5m. Third Prime led and was joined by Visa, Bancolombia Ventures, Krealo, Alaya Capital, Gaingels, Plug and Play and Winklevoss Capital. https://axios.link/3Q78ip0

• Lunr, a Minneapolis-based fintech inventory financing platform for retail brands, raised $6m in a funding round led by Mairs & Power Venture Capital. https://axios.link/3Mfv38S

• Ctrl Alt, a London-based alternative investing infrastructure company, raised $2.7m in seed funding. Forward Partners led and was joined by Middlegame Ventures. https://axios.link/3Qrh4zu

• Juuli, a London-based financial management system for freelancers, raised €1.2m in pre-Seed funding. https://axios.link/3Q0Vv7e

• BRLA Digital, a cross-border payment and cryptocurrency infrastructure fintech, raised R$3m (USD$600,000) in pre-seed funding led by Coins and Rodrigo Benez. https://axios.link/46ZrM5J

5. Deals!

• Jonny Fry, previously CEO of TeamBlockchain, was named head of digital assets strategy at ClearBank. https://axios.link/473WCKk

6. It's personnel

🎡 Situational awareness: Tonight @ 7pm, we're hosting an event exploring innovations shaping the future of fintech, including conversations with Lead Bank chair and CEO Jackie Reses and Plaid COO Eric Sager.

🚶‍♀️ @Lucinda really has her steps in.

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.

October 24, 2023

1 big thing: Stripe CRO on new role, AI and more