Stripe Eyes $1B Acquisition of Stablecoin Startup Bridge
Stripe is in talks to acquire crypto stablecoin startup, Bridge, at a deal valued at $1 billion.
The move comes just months after Stripe cofounder, John Collison, declared, "crypto is back," and would mark the fintech unicorn's largest acquisition to date.
Crypto is back. @Stripe will start supporting global stablecoin payments this summer. Transactions instantly settle on-chain and automatically convert to fiat. Join the waitlist https://t.co/hws2OsU3Id and watch the demo (h/t @Solana) from Sessions. pic.twitter.com/zGKYW2FM6i
— John Collison (@collision) April 25, 2024
Bridge, which provides infrastructure for stablecoins, raised $58 million in total, with a recent $40 million Series A round that valued it at $200 million. It also attracted interest for a potential Series B raise at a higher valuation.
Regulatory issues such as licenses and compensation for Bridge's founders, Zach Abrams and Sean Yu, are potential obstacles, however.
Stripe, valued at $70 billion, paused crypto payments in 2018 due to technical problems and high fees but introduced a new “Pay with Crypto” feature earlier this month. The service integrates stablecoins with its checkout service, charging a 1.5% transaction fee.
“One thing we say internally is [that] it turns out the killer app for crypto is just money,” president Will Gaybrick said.
Just this week, Binance USD (BUSD) issuer, Paxos, unveiled its new payments platform, with Stripe as its inaugural customer.
Bridge's cross-border payments solutions have processed over $5 billion in annualized payments and has a customer list that includes the US State Department, US Treasury, SpaceX and Coinbase. Its investors include 1confirmation, Bedrock, Haun Ventures, Index Ventures, Oak HC/FT, and Ribbit.
Abrams and Yu previously built Venmo competitor, Evenly, which they sold to Block in 2013. Abrams also held senior roles at Coinbase and Brex, while Yu worked at DoorDash and Airbnb, before the pair founded Bridge in 2022.
By acquiring Bridge, Stripe would strengthen its position in the stablecoin market, which has a market cap of $170 billion.
According to recent reports, there has been a recent record surge in the number of stablecoin transactions. Stablecoin liquidity surged to an all-time high of $169 billion at end of last month, reflecting a 31% growth since the beginning of the year.
Tether's USDT maintained its leading position, with its market cap expanding by $28 billion to nearly $120 billion, representing 71% of the market.
Circle's USDC also experienced notable growth, with its market cap climbing by $11 billion to $36 billion, a 44% increase year-to-date, capturing 21% of the market share.
Earlier this week, Tether revealed plans to explore lending opportunities in the commodities trading sector. This new venture comes on the heels of the company's record-breaking profits, with a staggering $5.2 billion in earnings for the first half of 2024 alone.