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Comment by ffggvv | Hacker News Reader

am i the only one that thinks fintech is massively overvalued? especially square etc, or anything adjacent. sure they have great growth and revenue but i don’t see any path where profit can justify the value

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Fintech (And indeed Stripe, Square and Plaid in particular) are grossly overvalued. They all play the hype game, with statement such as "Stripe powers the internet". Way too many people are buying into those valuations without looking at the fundamentals.

I see as fintech overvalued, not because it's hype or a bubble, but because an already pre-existing part of society had a disproportionate amount of value extracted from it by the financial sector in general.

As these companies eat into traditional banking, even if they halve or quarter the overall market cap through disruption, it remains an obscene amount of money. Except it's more monopolized into a few dozen global tech companies who can execute than what used to be a market of tens of thousands of banks, insurance, stock brokers etc.

The main value for Stripe is not in the payments processing itself (I would estimate they take about 0.2% from TPV as fees). The main value is the add on services, and in particular short term loans to SMBs secured by incoming payments. Overall, Stripe is a strong and successful business with room to grow. Is >100x P/E justified? Probably not from pure financial perspective. However if you take into account “hype” then the price is about right.

It's not e.

You aren't the only one. That being said, the markets they play in will probably end up bigger than you might expect. Plus, the competition is pretty bad. Stripe has a good number of people who have 20 iq points + more ambition when compared to the equivalent person working at a competitor.

> Stripe has a good number of people who have 20 iq points + more ambition when compared to the equivalent person working at a competitor.

Lmao. Is that some kind of Poe's Law? Can't believe someone would say anything like this seriously.

I meant it seriously. Stripe is a payments company - it's not super exciting stuff. With few exceptions the competition are legacy providers which don't attract extremely smart, ambitious people. Just as some examples: Stripe have a good number of formerly high ranking google folks on the engineering side, a good number of former Goldman people etc on the finance side, and the Collisons are freakishly smart guys, especially for their age.

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