Sep
10
2019
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Payments giant Stripe debuts a credit card in its latest step into the financing fray

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 U.S., 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 within minutes download a virtual card 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.

Jun
06
2019
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The Ticket Fairy is tech’s best hope against Ticketmaster

Ticketmaster’s dominance has led to ridiculous service fees, scalpers galore, and exclusive contracts that exploit venues and artists. The moronic approval of venue operator and artist management giant Live Nation’s merger with Ticketmaster in 2010 produced an anti-competitive juggernaut. It pressures venues to sign ticketing contracts under veiled threat that artists would otherwise be routed to different concert halls. Now it’s become difficult for venues, artists, and fans to avoid Ticketmaster, which charges fees as high as 50% that many see as a ripoff.

But The Ticket Fairy wants to wrestle control of venues away from Ticketmaster while giving fans ways to earn tickets for referring their friends. The startup is doing that by offering the most technologically advanced ticketing platform that not only handle sales and checkins, but acts as a full-stack Salesforce for concerts that can analyze buyers and run ad campaigns while thwarting scalpers. Co-founder Ritesh Patel says The Ticket Fairy has increased revenue for event organizers by 15% to 25% during its private beta focused on dance music festivals.

Now after 850,000 tickets sold, it’s officially launching its ticketing suite and actively poaching venues from EventBrite as it moves deeper into esports and conventions. With a little more scale, it will be ready to challenge Ticketmaster for lucrative clients.

Ritesh’s combination of product and engineering skills, rapid progress, and charismatic passion for live events after throwing 400 of his own has attracted an impressive cadre of angel investors. They’ve delivered a $2.5 million seed round for Ticket Fairy adding to its $485,000 pre-seed from angels like Twitch/Atrium founder Justin Kan, Twitch COO Kevin Lin, and Reddit CEO Steve Huffman. The new round includes YouTube founder Steve Chen, former Kleiner Perkins partner and Mark’s sister Arielle Zuckerberg, and funds like 500 Startups, ex-Uber angels Fantastic Ventures, G2 Ventures, Tempo Ventures, and WeFunder. It’s also scored music industry angels like Serato DJ hardware CEO AJ Bertenshaw, Spotify’s head of label licensing Niklas Lundberg, and celebrity lawer Ken Hertz who reps Will Smith and Gwen Stefani.

“The purpose of starting The Ticket Fairy was not to be another EventBrite, but to reduce the risk of the person running the event so they can be profitable. We’re not just another shopping cart” Patel says. The Ticket Fairy charges a comparable rate to EventBrite’s $1.59 + 3.5% per ticket plus payment processing that brings it closer to 6%, but Patel insists it offers far stronger functionality.

Constantly clad in his golden disco hoodie over a Ticket Fairy t-shirt, Patel lives his product, spending late nights dancing and taking feedback at the events his clients host. He’s been a savior of SXSW the past two years, injecting the aging festival that shuts down at 2am with multi-night after-hours raves. Featuring top DJs like Pretty Lights in creative locations cab drivers don’t believe are real, The Ticket Fairy’s parties have won the hearts of music industry folks.

The Ticket Fairy co-founders. Center and inset left: Ritesh Patel. Inset right: Jigar Patel

Now the Y Combinator startup hopes its ticketing platform will do the same thanks to a slew of savvy features:

Earn A Ticket – The Ticket Fairy supercharges word of mouth marketing with a referral system that lets fans get a rebate or full-free ticket if they get enough friends to buy a ticket. 30% of ticket buyers are now sharing a Ticket Fairy referral link, and Patel says the return on investment is $30 in revenue for each $1 paid out in rewards, with 10% to 25% of all ticket sales coming from referrals. A public leaderboard further encourages referrals, with those at the top eligible for backstage passes, free merch, and bar tabs. And to prevent mass spamming, only buyers, partners, and street teamers get a referral code.

Creative Payment Options – The startup offers “FreeFund” tickets for free events that otherwise see huge no-show rates. Users pay a small deposit that’s refunded when they scan their ticket for entry, discouraging RSVPs from those who won’t come. Buyers can also pay on layaway with Affirm or LayBuy and then earn a ticket before their debt is due.

Anti-Scalping – The Ticket Fairy offers identity-locked tickets that must be presented with the buyer’s ID on arrival, which means customers can’t scalp them. Instead, the startup offers a waitlist for sold out events, and buyers can sell their tickets back to the company which then redistributes them at face value with a new QR code to a specific friend or whoever’s at the top of the waitlist. Patel says client SunAndBass Festival hasn’t had a scalped ticket in five years of working with the ticketer.

Clever Analytics – Never wasting an opportunity, The Ticket Fairy lets events collect contact info and demand before ticket sales start with its pre-registration system. It can ceate multiple variants of ticketing sites designed for different demographics like rock vs dance fans for a festival, track sales and demographics in real-time, and relay instant stats about checkins at the door. Integration of email managers like MailChimp and sales pixels like Facebook plus the ability to instantly retarget people who abandoned their shopping via Facebook Custom Audience ads makes marketing easier. And all the metrics, budgets, and expenses are automatically organized into financial reports to eliminate spreadsheet busywork.

Still, the biggest barrier to adoption remains the long exclusive contracts Ticketmaster and other giants like AEG coerce venues into in the US. Abroad, venues typically work with multiple ticket promoters who sell from the same pool, which is why 80% of The Ticket Fairy’s business is international right now. In the US, ticketing is often handled by a single company except for the 8% of tickets artists can sell however they want. That’s why The Ticket Fairy has focused on signing up non-traditional venues for festivals, trade convention halls, newly built esports arenas, as well as concert halls.

“Coming from the event promotion background, we understand the risk event organizers take in creating these experiences” The Ticket Fairy’s co-founder and Ritesh’s brother Jigar Patel explains. “The odds of breaking even are poor and many are unable to overcome those challenges, but it is sheer passion that keeps them going in the face of financial uncertainty and multi-year losses.” As competitors’ contracts expire, The Ticket Fairy hopes to swoop in by dangling its sales-boosting tech. “We get locked out of certain things because people are locked in a contract, not because they don’t want to use our system.”

The live music industry can brutal, though. Events can have slim margins, organizers are loathe to change their process, it’s a sales heavy process convincing them to try new software. But while record business has been redefined by streaming, ticketing looks a lot like it did a decade ago. That makes it ripe for disruption.

“The events industry is more important than ever, with artists making the bulk of their income from touring instead of record sales, and demand from fans for live experiences is increasing at a global level” Jigar concludes. “When events go out of business, everybody loses, including artists and fans. Everything we do at The Ticket Fairy has that firmly in mind – we are here to keep the ecosystem alive.”

Jan
10
2019
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Daily Crunch: How the government shutdown is damaging cybersecurity and future IPOs

The Daily Crunch is TechCrunch’s roundup of our biggest and most important stories. If you’d like to get this delivered to your inbox every day at around 9am Pacific, you can subscribe here:

1. How Trump’s government shutdown is harming cyber and national security
The government has been shut down for nearly three weeks, and there’s no end in sight. While most of the core government departments — State, Treasury, Justice and Defense — are still operational, others like Homeland Security, which takes the bulk of the government’s cybersecurity responsibilities, are suffering the most.

2. With SEC workers offline, the government shutdown could screw IPO-ready companies
The SEC has been shut down since December 27 and only has 285 of its 4,436 employees on the clock for emergency situations. While tech’s most buzz-worthy unicorns like Uber and Lyft won’t suffer too much from the shutdown, smaller businesses, particularly those in need of an infusion of capital to continue operating, will bear the brunt of any IPO delays.

3. The state of seed 

In 2018, seed activity as a percentage of all deals shrank from 31 percent to 25 percent — a decade low — while the share and size of late-stage deals swelled to record highs.

4. Banking startup N26 raises $300 million at $2.7 billion valuation

N26 is building a retail bank from scratch. The company prides itself on the speed and simplicity of setting up an account and managing assets. In the past year, N26’s valuation has exploded as its user base has tripled, with nearly a third of customers paying for a premium account.

5. E-scooter startup Bird is raising another $300M 

Bird is reportedly nearing a deal to extend its Series C round with a $300 million infusion led by Fidelity. The funding, however, comes at a time when scooter companies are losing steam and struggling to prove that its product is the clear solution to last-mile transportation.

6. AWS gives open source the middle finger 

It’s no secret that AWS has long been accused of taking the best open-source projects and re-using and re-branding them without always giving back to those communities.

7. The Galaxy S10 is coming on February 20 

Looks like Samsung is giving Mobile World Congress the cold shoulder and has decided to announce its latest flagship phone a week earlier in San Francisco.

Oct
11
2018
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Zuora partners with Amazon Pay to expand subscription billing options

Zuora, the SaaS company helping organizations manage payments for subscription businesses, announced today that it had been selected as a Premier Partner in the Amazon Pay Global Partner Program. 

The “Premier Partner” distinction means businesses using Zuora’s billing platform can now easily integrate Amazon’s digital payment system as an option during checkout or recurring payment processes. 

The strategic rationale for Zuora is clear, as the partnership expands the company’s product offering to prospective and existing customers.  The ability to support a wide array of payment methodologies is a key value proposition for subscription businesses that enables them to service a larger customer base and provide a more seamless customer experience.

It also doesn’t hurt to have a deep-pocketed ally like Amazon in a fairly early-stage industry.  With omnipotent tech titans waging war over digital payment dominance, Amazon has reportedly doubled down on efforts to spread Amazon Pay usage, cutting into its own margins and offering incentives to retailers.

As adoption of Amazon Pay spreads, subscription businesses will be compelled to offer the service as an available payment option and Zuora should benefit from supporting early billing integration.

For Amazon Pay, teaming up with Zuora provides direct access to Zuora’s customer base, which caters to tens of millions of subscribers. 

With Zuora minimizing the complexity of adding additional payment options, which can often disrupt an otherwise unobtrusive subscription purchase experience, the partnership with Zuora should help spur Amazon Pay adoption and reduce potential friction.

“By extending the trust and convenience of the Amazon experience to Zuora, merchants around the world can now streamline the subscription checkout experience for their customers,” said Vice President of Amazon Pay, Patrick Gauthier.  “We are excited to be working with Zuora to accelerate the Amazon Pay integration process for their merchants and provide a fast, simple and secure payment solution that helps grow their business.”

The world subscribed

The collaboration with Amazon Pay represents another milestone for Zuora, which completed its IPO in April of this year and is now looking to further differentiate its offering from competing in-house systems or large incumbents in the Enterprise Resource Planning (ERP) space, such as Oracle or SAP.   

Going forward, Zuora hopes to play a central role in ushering a broader shift towards a subscription-based economy. 

Tien Tzuo, founder and CEO of Zuora, told TechCrunch he wants the company to help businesses first realize they should be in the subscription economy and then provide them with the resources necessary to flourish within it.

“Our vision is the world subscribed.”  said Tzuo. “We want to be the leading company that has the right technology platform to get companies to be successful in the subscription economy.”

The partnership will launch with publishers “The Seattle Times” and “The Telegraph”, with both now offering Amazon Pay as a payment method while running on the Zuora platform.

Apr
18
2018
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Stripe debuts Radar anti-fraud AI tools for big businesses, says it has halted $4B in fraud to date

Cybersecurity continues to be a growing focus and problem in the digital world, and now Stripe is launching a new paid product that it hopes will help its customers better battle one of the bigger side-effects of data breaches: online payment fraud. Today, Stripe is announcing Radar for Fraud Teams, an expansion of its free AI-based Radar service that runs alongside Stripe’s core payments API to help identify and block fraudulent transactions.

And there are further efforts that Stripe is planning in coming months. Michael Manapat, Stripe’s engineering manager for Radar and machine learning, said the company is going to soon launch a private beta of a “dynamic authentication” that will bring in two-factor authentication. This is on top of Stripe’s first forays into using biometric factors in payments, made via partners like Apple and Google. With these and others, fingerprints and other physical attributes have become increasingly popular ways to identify mobile and other users.

The initial iteration of Radar launched in October 2016, and since then, Manapat tells me that it has prevented $4 billion in fraud for its “hundreds of thousands” of customers.

Considering the wider scope of how much e-commerce is affected by fraud — one study estimates $57.8 billion in e-commerce fraud across eight major verticals in a one-year period between 2016 and 2017 — this is a decent dent, but there is a lot more work to be done. And Stripe’s position of knowing four out of every five payment card numbers globally (on account of the ubiquity of its payments API) gives it a strong position to be able to tackle it.

The new paid product comes alongside an update to the core, free product that Stripe is dubbing Radar 2.0, which Stripe claims will have more advanced machine learning built into it and can therefore up its fraud detection by some 25 percent over the previous version.

New features for the whole product (free and paid) will include being able to detect when a proxy VPN is being used (which fraudsters might use to appear like they are in one country when they are actually in another) and ingesting billions of data points to train its model, which is now being updated on a daily basis automatically — itself an improvement on the slower and more manual system that Manapat said Stripe has been using for the past couple of years.

Meanwhile, the paid product is an interesting development.

At the time of the original launch, Stripe co-founder John Collison hinted that the company would be considering a paid product down the line. Stripe has said multiple times that it’s in no rush to go public — and statement that a spokesperson reiterated this week — but it’s notable that a paid tier is a sign of how Stripe is slowly building up more monetization and revenue generation.

Stripe is valued at around $9.2 billion as of its last big round in 2016. Most recently, it raised $150 million back in that November 2016 round. A $44 million from March of this year, noted in Pitchbook, was actually related to issuing stock related to its quiet acquisition of point-of-sale payments startup Index in that month — incidentally another interesting move for Stripe to expand its position and placement in the payments ecosystem. Stripe has raised around $450 million in total.

The Teams product, aimed at businesses that are big enough to have dedicated fraud detection staff, will be priced at an additional $0.02 per transaction, on top of Stripe’s basic transaction fees of a 2.9 percent commission plus 30 cents per successful card charge in the U.S. (fees vary in other markets).

The chief advantage of taking the paid product will be that teams will be able to customise how Radar works with their own transactions.

This will include a more complete set of data for teams that review transactions, and a more granular set of tools to determine where and when sales are reviewed, for example based on usage patterns or the size of the transaction. There are already a set of flags the work to note when a card is used in frequent succession across disparate geographies; but Manapat said that newer details such as analysing the speed at which payment details are entered and purchases are made will now also factor into how it flags transactions for review.

Similarly, teams will be able to determine the value at which a transaction needs to be flagged. This is the online equivalent of when certain purchases require or waive you to enter a PIN or provide a signature to seal the deal. (And it’s interesting to see that some e-commerce operations are potentially allowing some dodgy sales to happen simply to keep up the user experience for the majority of legitimate transactions.)

Users of the paid product will also be able to now use Radar to help with their overall management of how it handles fraud. This will include being able to keep lists of attributes, names and numbers that are scrutinised, and to check against them with analytics also created by Stripe to help identify trending issues, and to plan anti-fraud activities going forward.

Updated with further detail about Stripe’s funding.

Jan
23
2018
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Tradeshift Frontiers innovation lab hopes to drive blockchain adoption in the global supply chain

Today, Tradeshift, a procure-to-pay supply chain management platform for SMBs and enterprise, announced Tradeshift Frontiers.  Frontiers is an innovation lab and incubator that will focus on transforming supply chains through emerging technologies such as distributed ledgers, artificial intelligence, and the internet of things. “The use cases we’re working through Frontiers cover… Read More

Dec
13
2017
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Commerce platform iZettle raises $47M at a $950M valuation

 iZettle — the commerce platform based out of Stockholm that competes against companies like Square, Paypal and SumUp to provide card transactions using smartphones and tablets as well as related accounting services — has raised another €40 million ($47 million) as it approaches a $1 billion valuation. CEO and co-founder Jacob de Geer told TechCrunch the money will go towards… Read More

Oct
03
2017
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Elements, Stripe’s new check-out toolkit, aims to boost e-commerce sales completions

 Stripe, the payments startup is now valued at $9 billion, is today taking the wraps off its latest effort to help its customers — which now number in the hundreds of thousands, and include companies like Lyft, Salesforce, Facebook, Deliveroo, and the U.K. government — generate more transactions, and thus greater returns for Stripe itself. It is launching Elements, a free toolkit… Read More

May
03
2017
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Square up 7% after surpassing quarterly expectations

 Square, the payments company founded and run by Jack Dorsey, released its quarterly financial results for the first quarter after the bell on Wednesday. The company beat expectations, bringing in $462 million in revenue, when investors were forecasting $451 million. This is a 22 percent increase from the same period last year. Read More

Mar
23
2017
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Lystable takes $10M top-up to tackle freelancer payments

 Lystable, a startup that makes a workflow management platform aimed at businesses needing to manage lots of freelancers, has topped up its Series A again — this time with an additional $10 million, which founder and CEO Peter Johnston says will be used to fund a change of business model with a payments focus. Read More

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