[HN Gopher] Stripe acquires Lemon Squeezy
___________________________________________________________________
Stripe acquires Lemon Squeezy
Author : drecoe
Score : 173 points
Date : 2024-07-26 16:39 UTC (6 hours ago)
(HTM) web link (www.lemonsqueezy.com)
(TXT) w3m dump (www.lemonsqueezy.com)
| the_mitsuhiko wrote:
| > Rest assured, we'll continue delivering the same fantastic
| product and reliability you've come to trust. We'll be in touch
| as we work through this process with any updates as they come
| along. We're excited about finding the best ways to combine Lemon
| Squeezy and Stripe.
|
| That sounds somewhat promising but not entirely committed.
| declan_roberts wrote:
| Just set a 1 year timer.
| th3w3bmast3r wrote:
| Yup - let's see it in a year.
| paxys wrote:
| It's a good PR statement, but founders who get acquired have
| zero authority to make such guarantees. You have a boss now,
| and they can change their mind whenever they want. They will do
| what's best for their business and customers, not yours.
| jjeaff wrote:
| I would much rather Stripe had bought it than PayPal. I'm still
| mad that they purchased Braintree and ruined it.
| com wrote:
| Same old pattern, M&A's are normally destructive of the
| acquired firm's value, but remove risk from the acquirer that
| something new and good is active in the market...
| pc wrote:
| Not a lack of commitment -- we just don't want to pre-announce
| the specifics.
| ezero wrote:
| Can you comment on if LS marketplace is still happening?
| LtWorf wrote:
| They might entirely change everything completely.
| 9dev wrote:
| That sounds like just about every single post-acquisition
| statement ever made.
| com wrote:
| And one year later, the product promise is dead, buried and
| rotten.
|
| I hope not, this time, but if I were a betting man...
| purple_ferret wrote:
| Founder just recently was thinking out loudly about how they
| could walk away with a big payday:
| https://youtu.be/K2aTHWd1QW0?t=2028
|
| I don't sticking with a product you've been working on for only
| 3 years is a big priority
| mgrandl wrote:
| Yikes
| rvz wrote:
| Now that's what I call horizontal integration, i.e. reducing
| competition.
| lolinder wrote:
| From TFA:
|
| > Lemon Squeezy has been processing payments on Stripe since
| our inception.
|
| They're not your competition if you are already their most
| important supplier.
| mattmaroon wrote:
| Yeah it's clearly vertical integration.
| janmo wrote:
| And now for sure they wont change that supplier. So yes it is
| suppressing competition.
| th3w3bmast3r wrote:
| Facts!
| mska wrote:
| What will happen to the Merchant of Record feature now? Hopefully
| they still keep it. That was the best part of lemon squeezy
| pc wrote:
| We will definitely keep it.
| emadda wrote:
| Will the MOR feature be merged into regular Stripe, or will
| they remain separate?
| HyprMusic wrote:
| Also wondering this. I was planning on making the jump to
| LS soon but if Stripe will be offering MoR services then
| I'd rather stay within Stripe's stack.
|
| I suspect (hope) Stripe Tax will soon offer a MoR service.
| I imagine this acquisition is mostly for their tax
| expertise & perhaps internal tools that do all the hard
| work behind the scenes.
| rvnx wrote:
| It's in fact the reason people love LemonSqueezy (though it
| uses Stripe under), due to simplifying a lot the VAT
| remittance.
| ssijak wrote:
| Please remove random add-on costs from lemon squeezy. There
| are fees on top of fees that can accumulate to almost 10%
| which is outrageous.
| thelittleone wrote:
| Stripe has a history of shutting down legit businesses and
| blocking payouts of their rightfully earned income, whilst
| also profiting off those frozen funds by investing it.
|
| Sad to see lemon squeezy acquired by stripe.
| danielmarkbruce wrote:
| Stripe has a history of cutting off payments to businesses
| which are violating the TOS. Stripe's TOS is largely a
| result of rules in place by banks and credit card
| companies. If Stripe don't shut them off, _they_ get shut
| off.
|
| To the extent they've made errors, I'd like to see you do
| better. The scale is enormous, there are fraudsters coming
| at you left and right. It's not an easy game to play.
| tonynator wrote:
| The number one justification for cryptocurrency in my
| book, even if it's less safe or convenient or even has
| small fees. Your business being subject to the whims of
| payment processors is ludicrous.
|
| Even with this being the justification, they could just
| say they won't be working with the customer in the
| future, not literally steal their customer's already
| earned money.
| danielmarkbruce wrote:
| Find me a single example of where Stripe kept the money
| themselves.
|
| In some cases they are legally obliged to hold onto
| funds. The don't get to keep them.
|
| You are putting yourself at risk of a lawsuit.
| sanswork wrote:
| All you're doing is moving the risk from the business to
| the consumer with crypto which is why it will never
| succeed. Consumers like all the things businesses hate
| about credit cards because they can get their money back
| if something goes wrong and when it comes to payments the
| customer decides who wins.
| carlosjobim wrote:
| Well said. We've offered for many years to our customers
| to pay by CC, bank transfer or Bitcoin. Exactly 0 people
| wanted to pay by Bitcoin, while the other two options are
| at about 50/50.
| galdosdi wrote:
| LOL. Being able to reverse transactions and freeze funds
| is a feature not a bug. With crypto you have no recourse
| when a criminal does criminal things or you make a
| mistake. Ransomware only started being a thing thanks to
| crypto, but governments could easily ban it (serious
| governments like US, China, Germany, that is)
|
| Crypto is useless for anyone but criminals. If you can't
| use the real, state controlled financial system, then you
| also can't use the real, state controlled property rights
| system. Who cares about being able to prove you own some
| bits if you are not protected by the law when you buy any
| actual tangible goods with those bits, like a house or a
| car or a business?
|
| Crypto is only useful when it's not needed (ie, you can
| use the state to enforce your physical property rights)
| and becomes useless once it's needed (you live in a
| corrupt or anarchist state that won't enforce your
| property rights over anything you can actually buy with
| the crypto)
|
| Crypto is becoming a form of government blind-eye-turned
| corruption, for carrying out corrupt financial practices
| with less immediate oversight and more ways to
| overcomplicate the logistics. It will probably cause a
| financial crisis one day, like in 2008, for the exact
| same reason complex derivatives did.
|
| I never take crypto jobs so my resume will stay clean
| when the house of cards falls down.
| djbusby wrote:
| Stripe is selective about which cannabis ancillary
| businesses they work with. Selective/preferential usage
| of the TOS.
| danielmarkbruce wrote:
| Just like any contract, every single possible
| circumstance cannot be enumerated and at some point a
| judgement call is required.
| alphabettsy wrote:
| I haven't seen this happen to a legit business yet. Each
| time I've read about the business has been shady and
| violates the TOS.
|
| I don't care for so much consolidation though.
| BoorishBears wrote:
| At least half the times I've seen it someone "super
| apologetic" comes out and fixes the issue, so not sure
| how that tracks.
| gjsman-1000 wrote:
| > Stripe has a history of shutting down legit businesses
| and blocking payouts of their rightfully earned income,
| whilst also profiting off those frozen funds by investing
| it.
|
| Almost every case I've seen, it's almost always because
| they were dabbling with NSFW, Cannabis, or another card-
| network-restricted category. And when you confront them
| about their story, they almost always respond with weasel
| wording: "It wasn't _really_ NSFW, or it was only _a
| little_ NSFW, or it 's not my responsibility if my _users_
| use it for NSFW... "
|
| It's also not like this is buried in the Terms of Service
| with ambiguous legalese. Stripe has a pretty beautifully-
| formatted page clearly saying what they are not OK with.
|
| https://stripe.com/legal/restricted-businesses
| localfirst wrote:
| "We will definitely keep it." - PC
|
| Empty words.
| TechDebtDevin wrote:
| This is depressing.
| jaundicedave wrote:
| merchant of record was one of the few things that stripe was
| missing. i'd be pretty worried if i worked at paddle.
| ezero wrote:
| I would actually be less worried. The support at paddle is much
| better than what I've seen from both stripe and LS. LS had
| decent support a year ago, but has really dropped off. Moving
| to stripe makes me excited about their product, but more
| worried about the support.
| ArturZhdanN wrote:
| I agree, it is the only feature paddle has over stripe IMO.
| While having only monthly payouts, high fee, lower conversion
| th3w3bmast3r wrote:
| I am always nervous about acquisition. Only time will tell if
| this is going to be good or bad.
| com wrote:
| Based on prior experience: almost certainly bad.
| fragmede wrote:
| Which experience specific to Stripe is that?
| com wrote:
| Every single product company acquisition, ever.
| wesselbindt wrote:
| It's not specific to stripe, it's acquisitions in general.
| It's consolidation. It's a move towards monopoly. It's a
| step away from a competitive market. Even the most hardened
| capitalist cannot claim with a straight face that this is a
| good thing.
| seanwilson wrote:
| Are there any plans to adjust the extra % fees that get added to
| international, PayPal, and subscription payments, and payouts?
| (https://docs.lemonsqueezy.com/help/getting-started/fees)
|
| I found these surprising as I didn't see them mentioned on the
| pricing page near "Transaction fees ... 5% + 50C/"
| (https://www.lemonsqueezy.com/pricing).
| vsl wrote:
| Yes, that was a surprise. It was nice to learn about another
| MoR offering, but this makes them uncompetitive with Paddle,
| who uses flat 5% + $0.50.
| Onavo wrote:
| Yes, Lemon Squeezy was not competitive with Paddle at all.
| They try to upsell users by offering more "nice to haves"
| like newsletter builders and ecommerce tools but for most
| SaaS founders Paddle is a much better deal.
| sidcool wrote:
| Stripe could easily replicate the features that lemon squeezy
| has. It's not about technology, it's about the clientele, brand
| and talent
| com wrote:
| And about Stripes internal inability to deliver on the actual
| product. Lemon Squeezy is laser focussed - Stripe is not.
|
| Smart founders will be looking carefully and observing how
| Stripe fails to retain clientele and think about creating
| something that fits the Lemon Squeezy gap in the market.
| purple_ferret wrote:
| Did Stripe get spooked by this?:
| https://www.lemonsqueezy.com/blog/guillermo-rauch-vercel-ceo
| alberth wrote:
| My guess, it's not.
|
| And probably just a great compliant to their TaxJar acquisition
| from 2021 (+ entry into Paddles space).
|
| https://stripe.com/newsroom/news/taxjar
| _heimdall wrote:
| I'd be a little suprised. No one should take Guillermo's claims
| on things like performance as an unbiased fact. They do make
| some very impressive things at Vercel, but G is a salesman
| first and foremost.
| moralestapia wrote:
| I disagree, Guillermo is a (great) developer at heart and
| spirit.
|
| He also happens to have found ways to profit from that.
| _heimdall wrote:
| I don't mean to say he isn't a skilled developer at all, I
| phrased my comment poorly if it read that way.
|
| He played a big role in early NextJS development and did
| great work. My comment was meant as a remark on his public
| persona, he is very willing to over promise and embelish on
| how something actually works.
| ilrwbwrkhv wrote:
| > Their most recent funding round was a $150m Series D at a
| whopping $2.5b valuation back in 2021, to give you a sense
| of the size of the company.
|
| How much are they worth now? I can only imagine their
| valuation has dropped. Does anyone use Vercel beyond free /
| low plans?
| BoorishBears wrote:
| Now I need to find a new payment provider. Stripe has burned too
| many people with too little remorse to ever risk something as
| critical as payments on them again.
| mmckelvy wrote:
| Is there a version of Lemon Squeezy for SaaS companies?
| leros wrote:
| That's what LemonSqueezy already is. You can setup
| subscriptions and disable their storefront, then it's perfect
| for SaaS.
| martinkostov wrote:
| Following!
| __natty__ wrote:
| LemonSqueezy itself or Paddle. Both are merchants of records.
| At least paddle (maybe LS too) allows reverse invoice which is
| important for some home grown startup saas as they simplify
| taxes to single customer (paddle), one invoice and one tax
| jurisdiction usually.
| nikolay wrote:
| Acquires the customers and the team?
| erulabs wrote:
| Good to see M&A get back on track -- PC, whom I would trust much
| more than any living economist, must be somewhat positive about
| the near future? Congrats to the lemon squeezy team!
| ajkjk wrote:
| Why do you prefer M&A happening?
| marrone12 wrote:
| It's nice for start ups to have liquidity events.
| 383toast wrote:
| also nice for customers to have less choice and presumably
| worse pricing?
| mattboardman wrote:
| Devil's advocate: more acquisitions creates more
| incentive to launch a start-up. More startups create more
| competition.
| paxys wrote:
| It's not a simple "acquisitions are good" or
| "acquisitions are bad" discussion. There is an ideal
| amount of M&A activity in an economy which is more than
| "no startup ever gets acquired" and less than "every
| startup is bought out by big tech". In recent years we
| have been closer to the first extreme, and very few
| startups have had exits of any kind.
| mattboardman wrote:
| Arguing good or bad on a single data point is reductive.
| I'm raising awareness that there is a counter argument
| for assuming excessive M&As is "bad."
| mrguyorama wrote:
| A startup made for the purpose of acquisition was never a
| competitor. If you are willing to sell to the big player
| in your industry you are not competing, you are an
| opportunist. A startup that wants to compete will run
| very differently from a startup that wants to be
| purchased.
|
| A big whale company that gobbles up some of the fifty
| startups that only have like 2% of the market total is
| not a competitive market at all.
| mattboardman wrote:
| >A startup made for the purpose of acquisition was never
| a competitor
|
| You cannot get acquired unless you represent a percentage
| of market share, have IP which will lead to greater
| market share, and/or have employees who can expand market
| share for a product.
|
| >A big whale company that gobbles up some of the fifty
| startups that only have like 2% of the market total is
| not a competitive market at all.
|
| A big whale company performing that many M&As to little
| startups is essentially fueling future competitors. If I
| was an investor I would see that market as valuable for
| the unicorn breakthrough possibility or at least an
| eventual acquisition exit event.
| mcmcmc wrote:
| > A big whale company performing that many M&As to little
| startups is essentially fueling future competitors.
|
| What an absolute load. They are stamping out competition,
| concentrating market power, and making red oceans even
| redder. If you were an investor I wouldn't give you my
| money to gamble with.
| erulabs wrote:
| Lots of reasons, but three big ones:
|
| I like to root for the home team (tech entrepreneurs like my
| former self getting paid out for taking a risk makes me
| happy)
|
| M&A activity is a positive sign for the economy. Stripe
| wouldn't be buying companies if they thought the economy was
| about to fall off a cliff, and Stripe is full of smart people
| (disclosure: I am a former Stripe).
|
| If there were no acquisitions happening, starting (another)
| company would be much tougher to justify to my wife and my
| self.
| mbStavola wrote:
| Merchant of Record is a cool feature to have-- Stripe Tax _works_
| well but the pricing structure is horrible. Paying a flat fee for
| dedicated tax handling would be considerably better!
|
| Now if only we could somehow get MoR for marketplaces...
| gaadd33 wrote:
| Does Avalara handle MoR? I know they handle complex taxation in
| the US for the alcohol industry pretty well but I don't know
| their other features.
| igeligel_dev wrote:
| We have introduced flat fee pricing recently:
| https://stripe.com/tax/pricing
|
| MoR for marketplaces basically means merchant of record for
| Stripe Connect and you, as the platform, take the tax liability
| via the MoR functionality automatically for your sellers
| (connected accounts), right?
|
| Mind sending me an email at kevinpeters at stripe dot com?
| Would love to hear about the use case.
| guax wrote:
| Easy peasy
| anilshanbhag wrote:
| Merchant of record can be really big - the biggest issue today is
| price. 5% + 50c doesn't make sense if you are selling $5 per
| month subscriptions.
|
| Reduce the price to Stripe pricing + 1%, and this will be the
| default for everyone!
| saaaaaam wrote:
| It does make sense if and if the following apply: (a) you have
| touched the brand and trust it over other offerings (b) are
| tech-literate but semi-technical or non-technical or simply
| don't want to do anything more than a couple of clicks
| implementation (c) you are early enough in your journey that
| sales and revenue matter more than cost of revenue (d) any of
| the above originally but you solved those problems and now
| intertia/tech debt somewhere more urgent.
|
| That's a huge number of aspirational digital product vendors.
|
| 5 + 50 vs stripe's lower direct take (for me 1.5 + 20). I just
| did a quick calculation on a really basic/modest digital
| product business. Sell something at EUR25 and sell EUR50k -
| 2000 customers. That's going to be EUR7k with LSqz over a year,
| and with Stripe it's going to be EUR1.15k
|
| The difference is EUR16 a day.
|
| The business makes you EUR137 a day.
|
| If you spend a day each month sorting out admin and taxes
| because of stripe direct plus a few days paying a developer
| (you're non-technical remember!) then that could easily be a
| cost of EUR5500 a year. Total cost including card processing is
| EUR6150 and it's only EUR850 less than LemonSqueezy.
|
| Why would you move?
|
| And in particular why would you move sooner than 3 years if you
| are predicting similar revenue each year.
| l5870uoo9y wrote:
| > Nine months after our public launch in 2021, we surpassed $1M
| in ARR and never looked back.
|
| Stripe is buying a lucrative business, but more importantly it is
| buying the complex knowhow of running an international tax-
| compliant merchant of record. They can then integrate this into
| their product. I switched to LemonSqueezy primarily out of
| concern for EU-wide tax ramifications (EU strikes again). Is
| there a reason to choose LemonSqueezy over Stripe if you are
| located in the US? There hasn't been a single VAT-compliance case
| to my knowledge and the need for MoR is unclear.
| johneth wrote:
| > Is there a reason to choose LemonSqueezy over Stripe if you
| are located in the US? There hasn't been a single VAT-
| compliance case to my knowledge and the need for MoR is
| unclear.
|
| It's not just the EU that charges VAT (or VAT-like taxes).
|
| Most countries (and in the US's case, subregions within) charge
| some form of sales tax that's a pain to manage yourself if
| you're not a huge operation.
|
| Always good to comply with tax laws (if not for the obviously
| good moral/ethical reasons, then definitely for legal reasons!)
| l5870uoo9y wrote:
| US states have a minimum threshold of $100,000 and upwards so
| you can be compliant without having to worry about it until
| you start making larger revenue. Most startups never reach
| these generous thresholds in the first place.
| nodamage wrote:
| As I understand it the threshold is usually $100,000 in
| revenue _or_ 200 transactions (following the _Wayfair_
| decision), the latter of which is easily reached...
| drewda wrote:
| In addition to the overall benefits of not having non-compete
| agreements, California's software startup ecosystem also
| benefits from not having to deal with charging sales tax when
| selling SaaS[1][2]
|
| [1] https://www.taxjar.com/blog/saas-california-sales-tax [2]
| https://www.cdtfa.ca.gov/lawguides/vol1/sutr/1502.html
| lotsofpulp wrote:
| If they are selling SaaS to an entity in California. Which
| is the same for anyone selling SaaS to an entity in
| California, regardless of where the seller is located. I do
| not see why this would give California a competitive
| advantage in where a business's employees are located.
| HyprMusic wrote:
| I've never understood the notion that US based companies have
| it easier. They still to pay applicable tax in every
| country/state that their customers reside.
|
| If anything, EU companies have it slightly easier because they
| can file all of their EU-based taxes using One Stop Shop.
| supportengineer wrote:
| Instead of calling Stripe directly, customers call Lemon Squeezy
| directly - it's an abstraction layer around the Stripe API.
|
| What's the barrier to entry for starting up a similar business?
| konha wrote:
| > What's the barrier to entry for starting up a similar
| business?
|
| The merchant of record model.
| igeligel_dev wrote:
| I am working on Stripe Tax, but do not know Lemon Squeezy so
| well yet. But something Lemon Squeezy does different are the
| following: the KYC works different and is more restrictive. One
| of the differences to Stripe considering we still give you as a
| merchant the responsibility to be tax-compliant after all (you
| need to add tax registrations into stripe explicitly). Also
| think about maybe fraudulent cases, LS must be much more
| restrictive otherwise their payment provider is blocking them.
|
| One thing which is weird about tax is physical presences in
| some cases. In some countries, you actually might need a
| representative to file your taxes. Plus you need to learn how
| to register in those countries and how to file taxes.
|
| There are probably more things that you need to look up, but
| that's what I remember.
| alberth wrote:
| Stripe itself, is an abstraction layer onto of payment network
| and banking APIs.
|
| What's the barrier to entry for starting up a similar business?
| mtlynch wrote:
| I find this pretty disappointing.
|
| There's so little competition in the payments space, and this
| acquisition means that there's even less. I know LemonSqueezy
| already relied on Stripe, but before the acquisition, there was
| still a potential path for them to break that dependency.
|
| I tried out LemonSqueezy a bit last year and had a mediocre
| experience, but it was at least nice to see a payment provider
| focused on simple, straightforward use cases. Stripe and Paddle
| have so many different customers and flows that it's hard to use
| them for simple, standard things. I was hoping to see
| LemonSqueezy fill that niche, but now Stripe is folding
| LemonSqueezy into the rest of their complex systems.
| nerder92 wrote:
| This company screams "Stripe please buy me" so so much.
|
| From branding to the all UVP, it was a fast exit because it was
| meant to be.
|
| Still a massive achievement
| ilrwbwrkhv wrote:
| Totally and this is the problem with startup founders of today.
| Their minds are filled with liquidity and an exit event. Steve
| Jobs had famously said how pathetic that is. And Zuckerberg,
| love or hate him, turned down billion dollars.
|
| Selling your startup is not a good plan. Make it big, change
| the world, and swim in money.
| mcmcmc wrote:
| Ok Scrooge McDuck
| localfirst wrote:
| Your comment being downvoted is quite telling of the founders
| that are joining YC
|
| they are looking at quick exits especially in this high
| interest rate environments and so are the backers
|
| Very few entrepreneurs are looking to create companies that
| will provide its workers with forever jobs
|
| It's sad but those few that are grinding it out and creating
| jobs, helping economies in those countries run proper are the
| unsung heroes.
|
| Time will tell where this American greed will take Americans
| but so far, its not looking good.
| julianeon wrote:
| Is that right? I hadn't noticed. I'm guessing that the design
| was such that it looked like Stripe, even if it wasn't
| officially a part of it (yet).
| xena wrote:
| I wanted to build something on top of Lemon Squeezy because
| stripe banned patreon-like services. Are you gonna extend that to
| Lemon Squeezy?
| paulryanrogers wrote:
| > stripe banned patreon-like services
|
| When did this happen?
| xyst wrote:
| It's scary how big stripe is becoming. Instead of competing just
| buy up other companies. Might be another company that will
| require regulatory intervention and break them up (same as when
| the govt broke up the railroads)
| baq wrote:
| > Instead of competing just buy up other companies.
|
| Zuck has shown the way.
| ghufran_syed wrote:
| And before them, Cisco
| mypalmike wrote:
| And the Dutch East India Company before that.
| input_sh wrote:
| As someone from a country not supported by Stripe, it is
| annoying how frequently I find some tool that I might want to
| use, only to discover Stripe's the only payout option.
| wubrr wrote:
| Out of curiosity - which country?
| ertucetin wrote:
| Now someone can create the new Lemon Squeezy, there will be a gap
| in the market.
| alberth wrote:
| I'm hoping this means Stripe Tax will finally get the capability
| of actually filing the appropriate paperwork & taxes in the
| geographies it's required.
| thallavajhula wrote:
| >Nine months after our public launch in 2021, we surpassed $1M in
| ARR and never looked back.
|
| >Along the way, we received many acquisition offers and (Series
| A) term sheets from investors. But despite the allure of these
| opportunities, we knew that what we had built was truly special
| and needed the right partner to take it to the next level.
|
| Wow. This is quite the smart and ballsy move. Congrats to the
| team. Looks like y'all knew what you were doing.
| localfirst wrote:
| I find the whole aspect of having MoR a fear mongering tactic to
| get you to pay extra transaction fees
|
| 99% of SaaS won't reach the MRR needed to justify MoR
|
| Of the 1% those breaking through 7 digit MRR can simply hire in
| house to manage tax remittance and not confuse their customers
| with invoices labelled with MoR's branding
|
| All in all this seems like the fear campaign has worked
| beautifully for Paddle and Lemonsqueezy but some of us saw right
| through it and never really felt the need to pay 5%~11% (!!)
|
| Looks like Stripe will shut down MoRs one by one
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(page generated 2024-07-26 23:06 UTC)