Stripe, Houzz and Credit Karma — emerging marketplace models
A quick follow up to my post on payment provider Stripe from last week — its early investor General Catalyst has now dedicated a $10 million fund specifically targeted for seed stage startups that build their technology on top of Stripe’s payment application. This development underscores Stripe’s success and its emergence as the leader in the mobile payment category.
The first startup benefitting from the “Stripe Fund” is Baremetrics, a cloud-based data analytics company that provides insights into Stripe’s business customers. Baremetrics’ analytics system can estimate a customer’s life time value, its possible churn rate, the right pricing model, and effectiveness of different promotion options. The 18 months old startup already counts over 33 million transactions logging through its solution.
Back to Stripe — its evolvement of being a marketplace for other applications is an indication for a successful and emerging star. Similar to how Facebook became a platform for games, gifts, etc., Stripe might soon become the go-to place for payment related tools and apps.
We have Stripe high on our priority list and believe it has a lot of growth potential in the mobile payment space.
In the fin-tech space, Credit Karma is one to watch out for as a potential near-term IPO. Launched in 2008, Credit Karma provides information and education around personal financing. It helps consumers find the most optimal financial product such as credit cards, loans and mortgages. It also provides insights and analytics around favorable financing options and works with peer-to-peer lending platforms Lending Club and Prosper, as well as with 9 out of the top 10 banks in the U.S.
The SF-based company has already over 32 million users and does not charge any fees to the user; instead, it generates revenue through its partnerships with financial institutions in return to directing customers who end up purchasing products.
Last week, Credit Karma raised $75 million of growth capital, valuing the company at more than $1 billion, from a major (but undisclosed) late-stage investor and from existing investors Google Capital, Tiger Global, and Susquehanna Growth Equity. Similar to Lending Club, which is on file to go public and expected to IPO at a $5–6 billion valuation, Credit Karma could be the next high-profile, fin-tech IPO to follow.
Houzz, the emerging marketplace for home decor and design that connects over 4 million professionals with 20 million home owners, released a new version of its marketplace platform that counts over one million items already. Houzz is not handling shipments or inventory, and lets users connect directly with manufacturers. It charges a 15% fee to the merchant for items sold through the platform. CEO Adi Tatarko recently described Houzz as five different companies under one roof — consisting of media, user-contributed content, referrals to professionals, discussion forums, and commerce all tied together. Earlier in the summer, Houzz raised $165 million at a $2.3 billion valuation from Sequoia, DST Global, NEA, GGV Capital and T.Rowe Price. We have Houzz up on our watch-list.
As published in A 2 Apple 10/5/14
