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Uber selects Stripe for payments
Fintech Headlines for May 3, 2023: Uber selects Stripe for payment processing, Airbnb partners with Klarna to enable paying for stays over time, and MercadoLibre's Fintech business decelerates
Welcome to the “Popular Fintech” newsletter! As expected, yesterday the Federal Reserve raised the fed funds rate by 25 basis points to 5.00 - 5.25%. According to the CME FedWatch Tool, investors think this was the last hike in this cycle. In the meantime,
Uber selected Stripe for payment processing in the U.S., the U.K., Canada, Mexico, Australia, and Japan,
Airbnb partnered with Klarna to allow its guess in the United States and Canada to pay for stays over time, and
MercadoLibre reported its first quarter 2023 results, showing signs of decelerating growth in its Fintech business
Uber Selects Stripe for Payment Processing
The payments giant Stripe announced an extension of its “strategic payments partnership” with the ride-hailing company, Uber (NYSE: UBER). Stripe will now process payments for the company’s Uber Rides and Uber Eats services in the United States, Canada, the United Kingdom, France, Malta, Mexico, Brazil, Australia, and Japan. Uber is operating in 70 countries and, according to Techcrunch, accepted more than $100 billion in payments last year. In its Annual Letter, Stripe disclosed processing $817 billion in payments in 2022, up 26% from the prior year. “Uber remains at the forefront of online payments today. As they look to provide ever more flexibility to their customers, we’re honored to do our part to help,” commented Will Gaybrick, president of product and business at Stripe, on the partnership.
In March 2023, Stripe raised $6.5 billion in new capital from Andreessen Horowitz, Founders Fund, Goldman Sachs, and Temasek to provide liquidity to current and former employees, as well as set a 12 months deadline for the decision regarding its heavily anticipated IPO. The funding round valued the company at $50 billion, marking a significant decline from its peak valuation of $95 billion two years ago. “The internet economy is still young, and the opportunities of the next 12 years will dwarf those of the recent past. There’s so much to discover and to create,” commented John Collison, cofounder and president of Stripe in the company’s press release.
Image source: Stripe
✔️ Stripe, a longtime partner of Lyft, signs a big deal with Uber
✔️ Uber partners with Stripe to enhance payments performance and reduce costs
✔️ Uber and Stripe Expand Partnership to Enable Pay by Bank
Airbnb Partners with Klarna to Offer Paying for Stays Over Time
Airbnb (NASDAQ: ABNB) launched a new category called "Airbnb Rooms," which allows guests to stay in a private room within a host's home. The idea is to provide affordable accommodation given the current economic environment, while also giving guests an opportunity to connect with locals and have authentic experiences. Each Airbnb Room comes with a "Host Passport," allowing guests to learn more about their host before booking. The new category includes over 1 million listings, redesigned filters, and new privacy features. Airbnb hopes that Airbnb Rooms will help more people feel comfortable staying with a host and will appeal to those looking for affordable travel options and authentic experiences.
The company is also partnering with the Swedish Buy Now Pay Later lender, Klarna, to allow guests in the United States and Canada to pay for their stays in four interest-free installments. If the booking costs more than $500, guests in the US can apply to pay for it monthly. This option will be expanded to other countries later in the year. In February, Klarna reported a 71% YoY growth in GMV in its US operations. With 34 million consumers, the US became Klarna's largest revenue market as of December 2022. This growth has been fueled by high demand for the Klarna App, which was recently named Forbes' Best Overall BNPL App of 2023. The app currently boasts over 8 million monthly active users and 30 million downloads.
Image source: Klarna on Twitter
✔️ Airbnb to allow guests to pay in four parts, brings in more price transparency
✔️ Airbnb launches new Rooms category with more details about hosts
✔️ Airbnb 2023 Summer Release: Introducing Airbnb Rooms, an all-new take on the original Airbnb
MercadoLibre’s Fintech Business Decelerates
MercadoLibre (NASDAQ: MELI), the Latin American e-commerce giant, reported its first quarter 2023 results yesterday after the market close, beating earnings expectations. Thus, Gross Merchandise Volume increased by 23% YoY to $9.4 billion, and Total Payment Volume increased by 46% to $37 billion. Total revenue for the quarter rose by 35% YoY to $3.0 billion. The company reported a Net Income of $201 million, up more than three times from $65 million in the first quarter of 2022, and an Adjusted EBITDA of $466 million, up from $223 million a year ago. MercadoLibre benefited from the collapse of the Brazilian retailed Americanas and announced its plans to hire 13,000 to boost its presence in the country.
While the company is primarily known for its e-commerce operations, it has also built a powerful Fintech franchise. Thus, the company’s Fintech arm, MercadoPago boasts more than 20 million unique users of its wallet and processed more than $120 billion in payments last year. In the first quarter of 2023, Fintech businesses contributed $1.36 billion, or 45% of the total company’s revenue, compared to $0.97 billion in the first quarter of 2022. Fintech revenue has been outpacing growth in e-commerce but is showing clear signs of deceleration. Fintech revenue increased 40% YoY in the first quarter of 2023, which, while still impressive, is a decline from the 107% growth that the company reported a year ago.
✔️ MercadoLibre Profit Jumps, Filling Vacuum Left by Americanas
✔️ MercadoLibre Sees Growth in Commerce and Financial Services in LatAm
✔️ MercadoLibre, Inc. First Quarter 2023 Letter to Shareholders
✔️ MercadoLibre Bucks Big Tech Layoffs By Adding 13,000 Jobs
Shopify (NYSE: SHOP) will report its Q1 2023 today before markets open, so I decided to take a look at the performance of Shopify shares this year. As you can see from the chart below, Shopify's shares are up 29.68% YTD (MercadoLibre’s shares are up 54.94% YTD). Do you see that drop in Shopify’s share price in February? This was when Shopify reported its Q4 2022 results.
P.S. Shopify moved their earnings release to the morning. Are they planning to announce something that’s better to announce in the morning?
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That’s it for today! Thank you for reading and see you tomorrow!
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Cover image source: Stripe
Disclaimer: Information contained in this newsletter is intended for educational and informational purposes only and should not be considered financial advice. You should do your own research or seek professional advice before making any investment decisions.