Stripe is a global payments processor that is pushing an acquisition to conclude with Bridge Network for $1.1 billion in cash. That would mark one of the biggest wins by crypto in recent times and at the same time be a high-profile success for venture capital investors. Compared to the valuation achieved by Bridge in August, the deal witnessed a 200 percent increase. The deal is being pushed to the close in a time when fewer companies are going public than were just a year ago.
This deal spells a huge windfall for investment firms Index Ventures and Haun Ventures. Indeed, Chris Ahn, who played a huge role in securing the initial investment for Bridge when at Index Ventures, is now a partner at Haun Ventures. Reflecting on his first attempts to seduce the Bridge founders, Ahn recalled a memorable visit all the way up to northern Montana in 2022, wherein he personally met with founders Zach Abrams and Sean Yu. This approach, in the end, brought Index into investment participation in the seed round of Bridge, which included big investors such as Sequoia and Ribbit Capital.
Stripe aims to improve its capabilities in the emerging, stable coin market, in which businesses can conduct transactions with cryptocurrencies pegged to stable assets like the U.S. dollar. Bridge presents itself as the “Stripe of crypto,” allowing businesses to accept stable coin payments without having to deal directly with digital tokens. It has customers like Coinbase and SpaceX.
Investors look at this as a strategic move even though Stripe is paying a premium, reportedly valuing Bridge at a multiple over 70 times its annual revenue of around $10 to $15 million. “I think Bridge has emerged as a leader in stable coin infrastructure,” Castle Island Ventures’s Nic Carter said in the report, adding that “its technology is integral to many of the stable coin startups.”.
It is a big deal for Stripe as it marks the company’s attempt to bring crypto into its core products, which have always been traditionally payment processing. Stripe’s CEO, Patrick Collison, recently said that stable coins would be important to financial services, drawing a comparison to “room-temperature superconductors.”
As Stripe progresses through a very volatile market, the Bridge buy propels the latter with new services within its portfolio and sets it well amidst changing dynamics of cryptocurrency, which further testifies the utility of stable coins. It is expected that the transaction will be finalized in the next several months when all regulatory approvals will be done for setting it up for Stripe to strengthen its leadership position in the digital payments arena.
