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Great product, been using it for a while. Turns out even a proxy can be worth $8bn with the right business model behind it. Users get an array of providers co
by apexalpha 28d ago
Great product, been using it for a while.
Turns out even a proxy can be worth $8bn with the right business model behind it.
Users get an array of providers competing behind a single API, meaning they have to compete on price and quality not vendor lock-in. This encourages users to join OpenRouter over specific model vendors.
Providers get easy access to revenue (and data) and new customers with little to no ad spending, encouraging them onto the platform too.
And that's all you need. Win win.
Well done and congratulations.
- hoppp 28d agoIt's a very straightforward business model and they started just in time to become popular as there are hundreds of alternatives out there. I also congratulate the founders for pulling this off.
- michaelbuckbee 28d agoI've been using OpenRouter since relatively early (I build evvl.ai - an eval platform on top of it) and think that they're selling at a good time. An underpinning of their model is that API calls / inference are similar across providers allowing for commodity tokenization cost comparisons, but the providers are beginning to shift to non commodity features that don't easily shift. For instance, calling Gemini with "search grounding" isn't something that OpenRouter can do (they sub their own web search in), last I checked they weren't doing real time voice models, etc.
- lxgr 28d ago> For instance, calling Gemini with "search grounding" isn't something that OpenRouter can do (they sub their own web search in) It can: https://openrouter.ai/docs/guides/features/server-tools/web-search#native-search-providers https://openrouter.ai/docs/guides/features/server-tools/web-... It's apparently even the default these days (which makes sense, as it's usually better in my experience).
- michaelbuckbee 28d agoNice. Happy to be mistaken on that point as that seems very useful.
- Whiteshadow12 28d agoYour main point is still right, the providers are beginning to shift to non-commodity features. Another example might be all the managed agent features, where you get a VM + model, right now it's mostly Google and Anthropic that have this offering. The service tier is another, where Google, Vertex, OAI, Anth offer it but only OAI and Google offer flex service tier and not all models from them get it. OpenRouter for me is an abstraction over that complexity, they will have their work cut out for them.
- mandevil 28d agoFortunately Stripe is in the business of providing a single abstraction over an enormous pit of complexity, so I think they'll be in good hands!
- 0x457 28d agoI can see Stripe adding extra services on top. However, in their main business its "easy" for them because getting into payment processing is hard intially. But whole search, harness, VMs, agent loops are not hard to find somewhere else.
- jatora 28d ago[flagged]
- croes 28d agoGiven the costs of the providers I doubt that sharing the revenue is a win for them. They are fighting to be the one and only
- giancarlostoro 28d agoSomeone noted they pass through 100 billion annually if I remember correctly, but they also take a 5.5% cut, so Stripe secures them as a “customer” while getting their money back over time. It also to me feels like an adjacent business aligned with sort of what Stripe already does to begin with, being someone elses middle man.
- throw03172019 28d agoThat feels high if they were bought at $7B? 5.5% of $100B is $5.5B in annual revenue. 1.3x multiple for AI. No way
- byzantinegene 28d ago100b sounds implausible if you consider that anthropic's revenue is only expected to reach 100b this year, 100m is more likely.
- alex43578 28d ago100b is too high, but 100m is way too low.
- deleted 27d ago[deleted]
- johnbarron 28d agoWho is that someone? And unnamed employee that told somebody else? They make less than 140 million in revenue, what today is like 5 signing bonus for OpenAI :-) They are not profitable and see through less than 2 billion in revenue. These are easy to check so...
- rajnathani 28d ago> Turns out even a proxy can be worth $8bn with the right business model behind it. People said a similar thing for Cursor simply being a VSCode wrapper for when it crossed unicorn status.
- 999900000999 28d agoMicrosoft is really really bad at marketing and making products consumers actually want. I really think they only know how to sell Azure. No reason Microsoft couldn’t have shipped a better version of Cursor considering they wrote the IDE cursor is based on.
- Flamkuchlo 28d agoI think it has to be more than just a 'proxy' what Stripe bought. Stripe and every other big company could build this without any issues. It either is just a really stupid business decision or it is about the name. The only model proxy i know is OpenRouter despite plenty of other model proxies existing.
- Gooblebrai 27d ago> Stripe and every other big company could build this without any issues. It either is just a really stupid business decision or it is about the name. The only model proxy i know is OpenRouter despite plenty of other model proxies existing I wait for the moment where engineers realise there's more to a product than just the building aspect.
- Flamkuchlo 27d agoSure if its not just about the name, then perhaps its the speed. Nonetheless, just because someone payed that much money for it, doesn't has to mean antyhing.
- Gooblebrai 27d agoIt means at least, that there's something of value in the company worth that amount of money. Regardless of what it is.