Stripe, the financial technology company, revealed in its annual letter released Thursday that it’s observing a significant “AI boom.” The company’s data indicates that artificial intelligence startups are experiencing faster growth than traditional SaaS (Software as a Service) companies.
Stripe presented a chart showcasing this trend. The top 100 AI companies, measured by revenue, reached $5 million in annualized revenue within 24 months in 2024. In contrast, the top 100 SaaS companies took 37 months to achieve the same revenue milestone in 2018.
“Our 2024 data shows these startups are building businesses at record pace,” wrote Stripe CEO and co-founders Patrick and John Collison. They cited specific examples to support their claim of rapid AI growth, including:
- Cursor, an AI-powered coding assistant, exceeding $100 million in revenue.
- Lovable reaching $17 million in Annual Recurring Revenue (ARR) “in just 3 months.”
- Bolt achieving $20 million in ARR within a two-month period.
“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,” the Collisons noted. They added, “Some people have called these startups ‘LLM wrappers’; those people are missing the point.”
Stripe emphasized that these new industry-specific AI tools are helping companies “properly realize the economic impact of LLMs and that the contextual, data, and workflow integration will prove enduringly valuable.” The founders highlighted startups like Abridge, Nabla, and DeepScribe, which are focused on improving patient and medical care, as well as architects utilizing SketchPro, as prime examples.
Stripe remains optimistic about vertical SaaS, particularly for small businesses. They noted that 6.3% of small and medium-sized businesses (SMBs) using vertical SaaS platforms powered by Stripe generate $1 million in total revenue during their first year, roughly 60% more than in a comparable benchmark.
The letter also revealed that Stripe’s payment volume grew to $1.4 trillion in 2024, marking a 38% increase compared to the previous year.
In related news, the company confirmed a tender offer on Thursday, where investors will purchase shares from employees at a valuation of $91.5 billion. Stripe also announced it will repurchase shares as part of the transaction.
