Stripe plans to acquire Bridge for $1 billion to deepen stablecoin business

A few months ago, Stripe co-founder John Collison declared that “cryptocurrencies are back.” Now, the fintech unicorn is in talks to acquire startup Bridge for $1 billion. According to foreign media (Forbes), five people familiar with the matter disclosed the news, three of whom confirmed the acquisition amount. If the deal goes through, it would be the largest acquisition to date for Stripe, which was last valued at $70 billion.

Bridge is an infrastructure provider for crypto stablecoins, focusing on helping businesses accept stablecoins for cross-border payments. Acquiring Bridge will provide Stripe with a strong backing, allowing the company to get deeper into the stablecoin industry. Stablecoins such as $USDT, $USDC and $DAI currently have a total market value of more than $173 billion, according to data from the (Forbis) Digital Asset Real-Time Tracker.

Source: Forbes The total market value of stablecoins is currently $173 billion

However, the deal is still under discussion and both parties may exit. Regulatory considerations, such as licensing, and compensation for employees including Bridge founders Zach Abrams and Sean Yu remain potential obstacles, two sources said. Stripe declined to comment, and Bridge did not respond to a request for comment.

Bridge’s Growth and Stripe’s Encryption Layout

Bridge's previous funding totaled $58 million, according to (Fortune) magazine. The most recent round was a $40 million Series A that valued the company at $200 million. The $1 billion acquisition valuation represents a significant upgrade from Bridge’s previous funding rounds. Bridge has received interest in a possible Series B round at a higher valuation, according to sources.

Bridge provides software that enables businesses to accept cross-border payments using stablecoins. Bridge’s annual payment volume has exceeded $5 billion, according to an August blog post by investor Sequoia. Its clients include the U.S. Department of State and Treasury, as well as companies such as SpaceX and Coinbase. Other notable investors include 1confirmation, Bedrock, Haun Ventures, Index Ventures, Oak HC/FT and Ribbit.

Source: Rootdata Bridge Financing Overview

Bridge’s founders, Abrams and Yu, are well-known entrepreneurs in the cryptocurrency and payments ecosystem. They created Evenly, a payments platform that competed with Venmo in 2013 and was later acquired by Block. Abrams has held senior positions at Coinbase and Brex, while Yu has worked at DoorDash and Airbnb. The two teamed up again in 2022 to found Bridge.

Stripe has made a number of acquisitions in recent years, but the terms of the deals were undisclosed. In 2021, Stripe acquired TaxJar, a new startup that had raised $62 million and had a private equity valuation of $179 million; in July this year, it acquired Lemon Squeezy, which declined a Series A financing invitation.

Stripe returns to crypto market, expands stablecoin payments

Stripe suspended cryptocurrency payments in 2018 due to technical difficulties and high transaction fees, but relaunched it in October this year. Stripe has launched a new “Pay with Cryptocurrency” feature, integrating stablecoins into its customer checkout service and charging a 1.5% transaction fee.

In an October 9 interview about the feature, Stripe President Will Gaybrick told Forbes that stablecoins could become a more efficient payment method for some consumers, especially outside the United States. He said:

"We often say internally that the killer application of cryptocurrency is actually money itself."

When asked directly whether Stripe was trying to acquire Bridge, Gaybrick did not respond directly. He said:

“What I can basically share is that we do invest a lot of money here (stablecoin industry), but there are currently no updates in this regard.”

If this acquisition goes through, it will symbolize Stripe's strong return in the crypto market and may change the landscape of stablecoin payments. However, challenges such as regulatory issues and workers' compensation still need to be overcome. In the future, whether Stripe can successfully complete this major acquisition and further expand its territory in the cryptocurrency industry deserves continued attention.

Further reading
Is the era of encrypted e-commerce coming? Payment giant Stripe re-embraces the currency circle, why does it support USDC in the first wave?
The exchange stands aside! How does Stripe join hands with Avalanche Chain to create a zero-friction transaction portal?
no sooner said than done! Stripe joins forces with Coinbase to make cryptocurrencies more integrated into financial system?