Business Breakdowns
Episode 50 Adyen: A First Principles Payment Platform
Business Breakdowns

Episode 50: Adyen: A First Principles Payment Platform

Business Breakdowns

Episode 50

Adyen: A First Principles Payment Platform

Michael Willar is a portfolio manager at Stenham Asset Management. We cover Adyen’s single-platform payments solution in detail, what has led it to achieve unusually high levels of profitability and growth, and why payments doesn't have to be a winner-take-all market.

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[00:02:55] - [First question] What Adyen is and what they do 

[00:05:54] - General overview of how payment processing works

[00:07:29] - Flow of a transaction and how they manifest

[00:09:52] - How the business generates revenue and their revenue model

[00:11:25] - Where Adyen sits in the industry and the size of it today

[00:13:37] - The reality of processing 50-60% of their addressable market 

[00:16:19] - What about their culture and founding story makes them so nimble 

[00:21:18] - The competitive strengths of the business and their innovative solutions 

[00:24:07] - Key revenue drivers for Adyen 

[00:26:01] - What is it about Adyen’s business structure that enables them to grow so rapidly while still being profitable

[00:29:34] - Key growth drivers 

[00:32:44] - What gives Adyen its competitive advantage over other payment providers

[00:35:56] - Having one platform is beneficial but why isn’t it a more popular approach? 

[00:37:42] - The secret sauce behind their successful growth trajectory

[00:39:25] - The essence of Adyen’s culture and how it manifests in their day-to-day work

[00:42:04] - What Adyen plans to do with all of the cash they produce

[00:43:35] - What keeps him up at night and potential threats to the business

[00:47:54] - Is there a chance anyone could build a platform comparable to Adyen?

[00:50:06] - Key differences between Stripe and Adyen

[00:56:23] - Lessons learned from studying Adyen and what payment service builders can learn from them

Adyen: A First Principles Payment Platform

Introduction

Zack
This is Zack Fuss and today we are breaking down European based pay business, Adyen. Adyen was found in Amsterdam in 2006 by a group of payments entrepreneurs who had already built and sold a business in the space. Adyen was their chance to start a fresh and build a modern solution to displace the patchwork legacy system that merchants were being forced to use. To breakdown the business, I'm joined by Michael Willar, a portfolio manager at Stenham Asset Management. Our discussion covers Adyen's single platform solution in detail, the driving force behind their track record of profitable growth, and why payments isn't a winner take all market. Please enjoy this breakdown of Adyen.

A Bird's Eye View of Adyen and Payments

Zack
So today we'll be breaking down Adyen, a large payment processing business. Despite its nearly $70 billion US market cap, it's a business that's relatively unknown by American investors. I thought a great place to start would be just briefly explain the business from a thousand feet.

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