Stripe’s startup toolkit Atlas opens for business in Cuba

A month ago, payments company Stripe launched Atlas, a toolkit for startups to incorporate in the U.S. and lay the groundwork for growing their businesses online. Aimed largely at small enterprises outside of the U.S., Atlas is making a notable addition to the roster of countries covered under the program: from today, it will begin to accept Atlas applicants from Cuba, so that Cuban startups can incorporate in the U.S.

The move represents one of the first big moves to bring U.S. tech services into Cuba, to give Cuban founders a way to extend their own ideas and enterprises to the U.S., and to foster tech trade with the country, made as Barack Obama becomes the first sitting president to visit the country in 90 years.

From the looks of it, there doesn’t appear to be much of a chance that President Obama’s visit to the country — scheduled to start Sunday — will lead to the U.S. trade embargo with Cuba getting cancelled outright, but the frosty relationship between the two nations is slowly thawing, and Stripe’s new highlights how the tech industry can both help and benefit from that.

Cuban startups will have full access to Atlas — Stripe’s first move to add products beyond payments. These include incorporation (for now, only in Delaware), share issuance for investors and employees, adding directors, setting up bank accounts and Stripe payment accounts, and working with specialists from companies like Orrick and PwC on taxes and other accounting details. As with other countries, Stripe is partnering with a local organization for outreach, in this case Merchise Startup Circle. In total Stripe is working with some 70 groups worldwide.

New regulations put in place will allow U.S. banks to open accounts for Cuban nationals who reside in Cuba, for the first time in many years. But since the updated guidelines were only announced on Tuesday, Stripe says its partners “are still working through the details of what they can offer to Cuban entrepreneurs.”

But Atlas will come at a cost: pricing for the service is $500, which includes all fees associated with incorporating your company (incorporating in Delaware alone costs $400, Stripe says), and opening your business bank account. (And payments are priced the same as Stripe’s standard fees of 2.9% + 30 cents per successful charge.)

It will be interesting to see whether Stripe either tries to adjust that $500 fee, or if organisations step up to help bring it down. Without help, it will be a big cost for startups in Cuba, where the average GDP per capita is $6,051.22, compared to $53,041 in the U.S.

On the other hand, even a $500 fee is less expensive than the investment a company would typically have to make to go through this process before Stripe launched Atlas. Previous routes would have required multiple trips to the U.S. and other fees, working out to thousands of dollars in costs, Stripe says.

Despite Cuba’s physical proximity to the U.S. — it’s only 90 miles from the coast of Florida — the country remains a world away from the U.S. when it comes to things like the digital divide, financial services and opportunities for its citizens.

Less than 4% of the population online today, and there is virtually no use of payment cards. But it’s also hit a wall and so unsurprisingly, the country, led by Raul Castro, is trying to change things. It has set itself a goal to have 50% broadband penetration by 2020, and despite years of communist rule there seems to be pretty capitalist undercurrent. Stripe says that a recent survey highlighted that more than 70% of Cubans said they wanted to start their own business.

Interestingly, Patrick Collison, Stripe’s co-founder and CEO, said that Stripe’s early move here to open up in Cuba came out of a direct request, after several people appealed directly to the White House to request it. “They reached out to us,” Collison said.

Adding Cuba to Atlas comes at a time when the Atlas is still in a pretty early state of life. Collison would not say how many companies are using Atlas, nor how many have signed up to its waiting list, but he says that the range of companies have covered 180 countries and been much bigger than Stripe had anticipated. “We have been floored by the response,” he said in an interview. 

For now, Atlas is taking a very slow approach to onboarding users who have signed up, he said, so that it can tweak and improve the product as it moves along in beta. “We want to access to Atlas to be as broadly available as possible,” he said. “The reason for the invites is not to be a gatekeeper but to make sure we’re solving the problems startups have and that the product is working the way we hoped it would.”

For now, he said, that has even included giving startup customers a cell phone number and WhatsApp ID for the person working on their Atlas account.

Stripe has raised $280 million in funding and is valued at $5 billion, and Atlas is an example of how the company is looking both to widen the funnel for the number of businesses that use its payments platform, as well as diversify the kinds of revenue-generating products that it can offer to them.