Stripe, Klarna, & the Fintech Resurgence—What’s Driving Valuations?
2/23/25 Benchmarks for Operators
What does the future hold for business?
Ask nine experts and you'll get ten answers. It's a bull market. It's a bear market. Rates will rise or fall. Inflation’s up or down. Can someone invent a crystal ball?
Until then, over forty-one thousand businesses have future-proofed their business with NetSuite, by Oracle - the number one cloud E.R.P., bringing accounting, financial management, inventory, and HR, into one fluid platform.
Whether your company is earning millions or even hundreds of millions, NetSuite helps you respond to immediate challenges and seize your biggest opportunities.
Download the CFO’s Guide to AI and Machine Learning for FREE
Stripe’s Valuation Jumps to $85B – What’s Changed?
Scuttlebutt on the street: Stripe is arranging a sale of employee shares that would value the company at $85 billion, up from $70 billion in its last employee tender.
Revenue? Over $4 billion, growing in the low 30%’s (per position.so)
That pegs them at a ~20x current revenue multiple and ~15x forward revenue multiple (rich!)
Makes sense given:
They’ve largely amortized their payments infrastructure moat.
Their strong mix of recurring payments and high margin software revenue.
The fact that investors still see them as the dominant private fintech (scarcity).
Now, compare that to Mercury, who’s rumored to raise at a $3B valuation on ~$500M in revenue. They’re rockin’. Not to mention, they’re incredibly profitable, with ~$200M in EBITDA (according to my man Arfur below).
That’s a ~6x current revenue multiple and maybe ~5x forward revenue multiple. This is super healthy, as the median fintech company I track trades at closer to 3x forward. But way off Stripe’s fat premium.
Why? Because not all fintech revenue streams are valued equally.
Online Payments Flow (Higher Multiples)
Stripe falls into this category, processing transactions for businesses and earning a fee on each payment
Investors value this revenue highly due to its scale, reocurring nature, and deep integration into business operations (you don’t just rip out your payment processor willy nilly over night. It’s the backbone to how you make money.)
Interchange Fees (Moderate Multiples)
Brex (corporate cards) falls into this camp, generating revenue by taking a fixed percentage of each transaction
This revenue is relatively predictable because interchange rates are set by networks (Visa, Mastercard) and financial partners
While scalable, interchange revenue is constrained by regulatory caps and competitive pressure
Interest Rate Revenue (Lower Multiples)
Mercury earns a big chunk from interest on customer deposits.
Remember - they lead with the banking product, not a payments product.
However, this revenue is highly sensitive to macro conditions, such as the Feds Fund rate, making it less predictable
Investors discount this relative to other streams due to it’s volatility and reliance on external factors
- did a great breakdown of how ZIRP days forced Mercury to build out other successful revenue streams
I call all of this out not because I think it’s “interesting”… it helps operators set valuation expectations correctly and informs how they think about resourcing their P&L to earn a premium mark.
Just as not all SaaS revenue is valued equally, there are nuances within Fintech (and every monetization model).
(Note: this is a simplification, as all of the above players have multiple revenue streams combining elements of multiple worlds. For example, Mercury also makes money off interchange fees (first from debit and now from credit cards). You get the gist.)
Chime & Klarna IPOs – Who Gets the Better Multiple?
Two big fintech IPOs are rumored for 2025:
Chime (Neobank model)
Revenue comes from interchange fees (debit cards) and some lending.
Last valued in the $25B range
Klarna (Buy Now, Pay Later)
Makes money from merchant fees + consumer lending.
Target valuation: $15B - $20B—a big rebound from $6.7B in 2022, but way down from its $46B peak in 2021.
Key risk? BNPL carries credit risk—investors worry about defaults, regulation, and whether this is a true payments business or just subprime lending in disguise.
And Christmas just came early for all of these guys. The new administration pretty much Ctrl Alt Deleted the Consumer Financial Protection Bureau, also known as a big ass headache for any consumer lending company. This is a massive tailwind to their IPO stories and derisks their revenue forecasts (for at least the next four years). This could pull their IPO timelines up.
Affirm's Comeback Shows the Market Still Wants BNPL
This newsletter helps you translate the macro of the public markets to the micro of your company, especially if it’s still private. So if you want a real-time public market comp for Klarna, look at Affirm (AFRM).
Stock is up big in 2025, hitting $79 at its peak—way up from its 2022 lows below $10.
Revenue surged to $866M last quarter, up 47% YoY. Congrats to CFO / COO Michael Linford (friend of the pod!) and team
On track for GAAP profitability by late 2025—which is a big deal in fintech.
Trading at 8x forward revenue as a result
Why does this matter for Klarna?
If Affirm can prove BNPL works at scale, Klarna benefits from stronger IPO demand.
But if Klarna can’t show cost control & profitability, investors won’t bite.
Bottom line: BNPL is back, but Klarna still has to prove it’s not just a boom-and-bust model.
Final Thoughts
If you’re a founder in these spaces, knowing how investors value your revenue model is critical. Are you payments-driven like Stripe, interchange on cards like Brex, interest-rate-sensitive like Mercury, or dealing with credit risk like Klarna? It’s all priced in.
TL;DR: The Hierarchy of Fintech Multiples
Higher multiples: Hybrid SaaS + Online Payments Processing (Stripe, Shopify, Brex Premium, Toast)
Moderate multiples: Interchange Fees (Brex, Chime), FX Revenue (Wise, Stripe cross border payments)
Lower multiples: Interest Revenue (Mercury), BNPL & Lending (Klarna, Affirm)
Listen to today’s post on: Apple | Spotify | YouTube
TL;DR: Multiples are DOWN week-over-week.
Top 10 Medians:
EV / NTM Revenue = 17.1x (DOWN 0.9x w/w)
CAC Payback = 29 months
Rule of 40 = 54%
Revenue per Employee = $401K
Figures for each index are measured at the Median
Median and Top 10 Median are measured across the entire data set, where n = 110
Population Sizes:
Security: 18
Database and Infra: 14
Backoffice: 16
Marcom: 16
Marketplace: 15
Fintech: 16
Vertical SaaS: 16
Revenue Multiples
Revenue multiples are a shortcut to compare valuations across the technology landscape, where companies may not yet be profitable. The most standard timeframe for revenue multiple comparison is on a “Next Twelve Months” (NTM Revenue) basis.
NTM is a generous cut, as it gives a company “credit” for a full “rolling” future year. It also puts all companies on equal footing, regardless of their fiscal year end and quarterly seasonality.
However, not all technology sectors or monetization strategies receive the same “credit” on their forward revenue, which operators should be aware of when they create comp sets for their own companies. That is why I break them out as separate “indexes”.
Reasons may include:
Recurring mix of revenue
Stickiness of revenue
Average contract size
Cost of revenue delivery
Criticality of solution
Total Addressable Market potential
From a macro perspective, multiples trend higher in low interest environments, and vice versa.
Multiples shown are calculated by taking the Enterprise Value / NTM revenue.
Enterprise Value is calculated as: Market Capitalization + Total Debt - Cash
Market Cap fluctuates with share price day to day, while Total Debt and Cash are taken from the most recent quarterly financial statements available. That’s why we share this report each week - to keep up with changes in the stock market, and to update for quarterly earnings reports when they drop.
Historically, a 10x NTM Revenue multiple has been viewed as a “premium” valuation reserved for the best of the best companies.
Efficiency Benchmarks
Companies that can do more with less tend to earn higher valuations.
Three of the most common and consistently publicly available metrics to measure efficiency include:
CAC Payback Period: How many months does it take to recoup the cost of acquiring a customer?
CAC Payback Period is measured as Sales and Marketing costs divided by Revenue Additions, and adjusted by Gross Margin.
Here’s how I do it:
Sales and Marketing costs are measured on a TTM basis, but lagged by one quarter (so you skip a quarter, then sum the trailing four quarters of costs). This timeframe smooths for seasonality and recognizes the lead time required to generate pipeline.
Revenue is measured as the year-on-year change in the most recent quarter’s sales (so for Q2 of 2024 you’d subtract out Q2 of 2023’s revenue to get the increase), and then multiplied by four to arrive at an annualized revenue increase (e.g., ARR Additions).
Gross margin is taken as a % from the most recent quarter (e.g., 82%) to represent the current cost to serve a customer
Revenue per Employee: On a per head basis, how much in sales does the company generate each year? The rule of thumb is public companies should be doing north of $450k per employee at scale. This is simple division. And I believe it cuts through all the noise - there’s nowhere to hide.
Revenue per Employee is calculated as: (TTM Revenue / Total Current Employees)
Rule of 40: How does a company balance topline growth with bottom line efficiency? It’s the sum of the company’s revenue growth rate and EBITDA Margin. Netting the two should get you above 40 to pass the test.
Rule of 40 is calculated as: TTM Revenue Growth % + TTM Adjusted EBITDA Margin %
A few other notes on efficiency metrics:
Net Dollar Retention is another great measure of efficiency, but many companies have stopped quoting it as an exact number, choosing instead to disclose if it’s above or below a threshold once a year. It’s also uncommon for some types of companies, like marketplaces, to report it at all.
Most public companies don’t report net new ARR, and not all revenue is “recurring”, so I’m doing my best to approximate using changes in reported GAAP revenue. I admit this is a “stricter” view, as it is measuring change in net revenue.
Operating Expenditures
Decreasing your OPEX relative to revenue demonstrates Operating Leverage, and leaves more dollars to drop to the bottom line, as companies strive to achieve +25% profitability at scale.
The most common buckets companies put their operating costs into are:
Cost of Goods Sold: Customer Support employees, infrastructure to host your business in the cloud, API tolls, and banking fees if you are a FinTech.
Sales & Marketing: Sales and Marketing employees, advertising spend, demand gen spend, events, conferences, tools.
Research & Development: Product and Engineering employees, development expenses, tools.
General & Administrative: Finance, HR, and IT employees… and everything else. Or as I like to call myself “Strategic Backoffice Overhead.”
All of these are taken on a Gaap basis and therefore INCLUDE stock based comp, a non cash expense.