Financial services and software as a service company Stripe has acquired Bridge, a stablecoin platform for USD $1.1 billion. As one of the largest crypto deals in history, it reignites the conversation around stablecoins as a potentially revolutionary use case for blockchain technology outside of Bitcoin’s “store of value” narrative. The acquisition hints at larger implications for stablecoins and the wider crypto venture capital landscape.
According to one of its founders, Bridge aims to build a global stablecoin payments network to "enable companies to use a stablecoin rail without thinking about it". The company enables businesses to accept fast and low-cost payments without needing to deal in stablecoins directly. Bridge was founded by Coinbase and Square alumni, and raised $40 million in August in a round led by Sequoia.
Stripe recently re-enacted stablecoin payments in the US via Solana, Ethereum and Polygon. Solana’s recent push to integrate stablecoins into its ecosystem has been notable, with efforts like attracting PayPal’s stablecoin and supporting Solana-native stablecoin-focused startups like Perena, Sphere, and Lulo. The Stripe acquisition signals that the demand for faster, cheaper stablecoin infrastructure is growing.
Stripe’s move bolsters confidence in the future of stablecoins, showing that major fintech players believe in their potential to transform payments and financial services. Just last week, A16Z's State of Crypto report observed that stablecoins have product-market fit with USD $8.5 trillion worth of transaction volume across 1.1 billion transactions in the second quarter of 2024 ending 30 June alone.
One of the enduring challenges in crypto venture capital has been the limited exit opportunities for startups. With traditional IPOs being rare in the space, VCs often rely on token launches and airdrops to generate returns, which can lead to short-term thinking and market volatility. Stripe’s acquisition of Bridge represents a more traditional pathway for VCs to exit through equity-based deals.
The deal suggests a potential dual-path exit strategy for crypto investments. The upside might be longer term thinking, with a renewed emphasis on product development and user growth, and away from short term token speculation.
Stripe’s acquisition signals that stablecoins might be the next big frontier in crypto. It also represents a broader vote of confidence in public blockchains as emerging payment rails.
By Steven Pettigrove and Luke Misthos
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