Stripe CEO says AI startups are growing faster than SaaS ever did and calling them wrappers ‘misses the point’ | TechCrunch

In its annual letter released Thursday, payments giant Stripe declared that it was “seeing an AI boom” with its data revealing that artificial intelligence startups are growing more rapidly than traditional SaaS companies have historically.

In a chart, Stripe showed that the top 100 AI companies (by revenue) were able to achieve $5 million in annualized revenue in 24 months in 2024 compared to the top 100 SaaS companies taking 37 months in 2018 to reach the same milestone.

“Our 2024 data shows these startups are building businesses at record pace,” wrote Stripe CEO and co-founder Patrick Collison.

Specifically, Collison pointed to AI-powered coding assistant Cursor exceeding $100 million in revenue, Lovable hitting $17 million in ARR “in just 3 months,” and Bolt achieving $20 million in ARR in two months’ time as examples of this AI boom.

“Much as SaaS started horizontal and then went vertical (first Salesforce and then Toast), we’re seeing a similar dynamic playing out in AI: we started with ChatGPT, but are now seeing a proliferation of industry specific tools,” he wrote. “Some people have called these startups ‘LLM wrappers’; those people are missing the point.”

Stripe said that new industry-specific AI tools are helping those players “properly realize the economic impact of LLMs and that the contextual, data, and workflow integration will prove enduringly valuable.”

As evidence of that, Collison pointed to startups such as Abridge, Nabla and DeepScribe as helping to revamp patient and medical care as well as architects using SketchPro.

Along that same vein, Stripe is still quite bullish on vertical SaaS, especially as it relates to small businesses, noting that 6.3% of SMBs powered by vertical SaaS platforms on Stripe earn $1 million in total revenue in their first year—nearly 60% more than in one benchmarked comparison set.

The letter also noted that payment volume in 2024 grew to $1.4 trillion, up 38% on the year before. The company on Thursday also confirmed a tender offer where investors will buy up shares from those employees at a valuation of $91.5 billion. Stripe said it will also repurchase shares as part of the transaction.