Payments giant Stripe has acquired Lemon Squeezy
A four-year-old competitor specializing in merchant of record (MoR) services. The news was announced by Lemon Squeezy on July 26, 2024. While the financial details of the deal remain undisclosed, the acquisition signals Stripe’s intent to strengthen its MoR offerings.
Lemon Squeezy simplifies global sales tax for digital products.
As a MoR, it handles the complexities of calculating and paying sales tax globally, including legal processing and fees in each country. The company primarily caters to SaaS (Software-as-a-Service) and software businesses.
Stripe Enthusiastic About the Acquisition
Stripe executives expressed their excitement about the acquisition on social media platforms. Stripe CEO Patrick Collison welcomed Lemon Squeezy on X (formerly Twitter), stating their plans to “scale merchant of record selling in a big way.” Chief Product Officer Will Gaybrick echoed this sentiment, highlighting the value Lemon Squeezy’s MoR product brings to Stripe’s offerings.
Lemon Squeezy Founders Opt for the Right Partner
In a blog post, Lemon Squeezy co-founder and CEO JR Farr revealed that the company received numerous acquisition offers and investor interest (Series A term sheets) since its public launch in 2021. Notably, Farr mentioned declining a $50 million Series A offer in a podcast. Despite these lucrative opportunities, Farr emphasized their focus on finding the ideal partner to propel Lemon Squeezy to the next level. He expressed pride in finding that partner in Stripe, completing the journey from inception to acquisition within three years.
Lemon Squeezy Achieves Impressive Growth
While current revenue figures were not disclosed, Farr stated that Lemon Squeezy surpassed $1 million in annual recurring revenue (ARR) within nine months of its 2021 launch. This rapid growth underscores the company’s success in addressing a critical need for digital product sellers. Interestingly, Lemon Squeezy has been processing payments through Stripe since its inception, further solidifying the strategic fit between the two companies.
This acquisition marks Stripe’s third acquisition in 2024. In March, the company acquired the four-person team from Supaglue, an open-source developer platform, in an “acqui-hire” deal. Last summer, Stripe purchased Okay, a low-code analytics software startup. These acquisitions demonstrate Stripe’s commitment to expanding its product portfolio and acquiring talent to fuel its growth.
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