Stripe’s $1.1 billion Acquisition of Bridge
Stripe has acquired Bridge for $1.1 billion. Let me explain why this company is worth paying attention to, even if you may have never heard of it.
Firstly, Stripe is heavily investing in the stablecoin space.
– Stripe’s co-founder demonstrated earlier this year how to accept stablecoins on Solana through Phantom.
– They have launched payment and collection features for cryptocurrencies, meaning any US merchant can accept stablecoins like USDC and settle in USD.
Even during a bear market, stablecoin trading volume continues to rise, and with support from efficient blockchains like Solana/Base, they have confidence in the adaptability of stablecoins in the market.
These will be iconic statements in financial history:
“Stablecoins are the room-temperature superconductors of financial services.”
Why did Stripe choose stablecoins?
Stripe is currently just a payment gateway that relies on networks like Visa and Mastercard:
– Charging additional fees of around 1-3%
– Dependence on banks and local partners
– Low authorization rates
Stablecoins can remove all intermediaries, allowing Stripe to control the entire technology stack.
However, in order for Stripe to control the stablecoin technology stack, they need to build:
– On/Off ramps (conversion between fiat and cryptocurrencies)
– Stablecoin issuance (e.g., Tether’s $10 billion annual profit)
– Complex stablecoin infrastructure (involving more than 20 blockchains, over 10 stablecoins, etc.)
They could spend years building these or achieve them directly through acquisitions.
Introducing Bridge
Bridge was founded in 2022 by two successful entrepreneurs (previously acquired by Square), and the founding team includes @zcabrams, former Chief Product Officer of Brex, and Sean, an engineer from Airbnb.
Their vision is to build various types of stablecoin APIs.
Initially, they operated by helping businesses accept stablecoin payments and establish stablecoin infrastructure (similar to Stripe’s approach in traditional finance).
In 2023, they secured an undisclosed seed funding round (estimated at around $18 million, led by Sequoia).
In the past two and a half years, they have developed the following APIs:
– Ramps (conversion between on/off ramps, converting any form of USD to other forms, e.g., converting USDC on Solana to USD)
– Issuance (minting stablecoins and investing reserves)
They have facilitated over $5 billion in transactions for clients such as stablecoin fintech applications like @getdolarapp (virtual accounts provided by Leeds Bank), global financial operations like @SpaceX and the US government, and payment services like @scale_AI paying their contractors.
They support various on/off ramps and cryptocurrency cards operations.
Who are their competitors?
There are many!
@ZeroHashX (larger scale but lacks reputation)
@Brale_xyz and @Paxos (stablecoin issuance; Paxos assisted in issuing PayPal’s PYUSD)
@CoinflowLabs
And any provider offering on/off ramps and stablecoin infrastructure.
Why choose Bridge?
Prioritizing APIs and integrating with Stripe’s technology stack
Acquiring potential competitors (e.g., integrating Bridge into stablecoin fintech companies planning to disrupt Stripe)
Providing complementary products (e.g., treasury services with stablecoin issuance, BaaS with cryptocurrency acceptance)
Shared investors: Sequoia and tech founders from San Francisco
Having a concise social media username: @stablecoin
Thanks to @gizmothegizzer for the contribution.
So why spend $1.1 billion?
Mainly because of the strong team – the founders have held leadership roles or worked at top startups like Airbnb, Brex, Coinbase, Square, making them the best choice to lead “Stripe Crypto Infrastructure.”
Licenses, products, market attractiveness, and customer base.
I speculate that this deal will be equity-based rather than cash-based.
From a strategic perspective, acquiring Bridge helps:
– Compete more rapidly with crypto-friendly giants like BlackRock, Revolut, and PayPal
– Achieve 24/7 global operations and break through limitations of localized payment systems (Stripe faced significant challenges when expanding into long-tail markets like Asia and Latin America)
Stripe’s next steps? My speculation:
– Continue supporting cryptocurrency on/off ramps and acceptance, while mastering Bridge’s APIs
– Deepen the development of stablecoin infrastructure (enabling global fintech companies to launch stablecoins, possibly even issuing their own stablecoin, STUSD, to fully control the ecosystem)
– Become an advocate for stablecoin payments, allowing every convenience store to accept stablecoins.
As a stablecoin enthusiast, I believe this is good news for the cryptocurrency market:
– This is the largest cryptocurrency acquisition ever (more acquisitions are expected)
– It is also Stripe’s largest acquisition (showing their grand vision for cryptocurrencies)
– Will this become a historic great acquisition like Instagram, truly boosting the internet’s GDP?
This article is a collaborative reprint from Shenzhen.
