The post was originally published in Russian on Startup of the Day. Alexander kindly agreed to republish what we think is of great value to our readers.
Shopify store turnover last year was $120 bln. Shopify’s revenue is 3 bln, 2.5% of turnover. This money is taken for the most complex platform for online stores, hundreds of features, and integrations.
Stripe’s turnover last year was $350 bln, revenue – $3 bln, just under 1% of turnover. This money is taken, in fact, for one form, “enter the card number.” Yes, there are miracles of anti-fraud and correct routing inside, but still, the ratio looks disproportionate. Oh, how much is there against simple payment acceptance, and the difference is only 3 times.
The resources of Shopify itself are unlimited; there’s Stripe counterpart, Shopify Payments. Similar smaller companies are forced to integrate with external processors and give them a significant part of potential revenue. The American #startupoftheday Tilled offers them dumping. We, they say, are the same as Stripe, but 3 times cheaper. We don’t take almost anything beyond the Visa share and the acquiring bank; we leave everything to you.
The startup only works with platforms similar to Shopify, not individual businesses. As a result, the startup owners don’t spend money on marketing among stores, don’t support sellers and end customers. So, in theory, the economy can converge with less commission than is accepted in the market.
At the same time, platforms may be less demanding on the quality of the payment window, its conversion rate, and protection against fraud. For example, if the store has chosen a payment system that is 1% worse and 1% cheaper, it’s at zero. However, if the conditional Shopify did the same, then 1% of the turnover was earned, a third of its revenue. Thus, the sellers on the site lost money – and, most likely, they did not even notice this; they weren’t given the tools for an accurate test
Tilled raised $11 mln in investment in May.
https://www.tilled.com/
#usa #rounda #fintech #technology
Translation : Valeria Stupnikova
Alexander made his career in Russian internet companies including Mail.Ru, Rambler, RBC. From 2016 to 2018 he was Chief Strategy and Analytics officer in Mail.Ru Group. In this position, he worked on M&A, investments, and new project launches. In 2018 he became Deputy CEO in Citymobil, a Russian Uber-like company that was invested by Mail.Ru Group and Sberbank (the biggest Russian bank), then he left the company to launch his own projects. Now Alexander is a co-founder of United Investors – the platform for co-investments in Russian early-stage startups. His blog #startupoftheday (#стартапдня) is one of the most popular blogs about startups in Russia.
