Stripe Acquires Bridge for $1.1 Billion
Stripe has acquired Bridge for $1.1 billion. Allow me to explain why this company is worth paying attention to, even if you may have never heard of it before.
Firstly, Stripe is making a big push into the stablecoin space.
– Earlier this year, Stripe’s co-founder demonstrated how to accept stablecoins on Solana through Phantom.
– They have launched cryptocurrency payment and collection features, which means any US merchant can accept stablecoins like USDC and settle in USD.
Even during a bear market, the trading volume of stablecoins continues to rise, and with the support of efficient blockchains like Solana/Base, they are confident in the adaptability of stablecoins in the market.
These will become iconic statements in financial history:
“Stablecoins are the room-temperature superconductors of financial services.”
Why did Stripe choose stablecoins?
Currently, Stripe is just a payment gateway that relies on networks like Visa and Mastercard:
– They charge an additional fee of about 1-3%.
– They rely on banks and local partners.
– They have low authorization rates.
Stablecoins can eliminate all intermediaries, allowing Stripe to control the entire tech stack.
However, in order for Stripe to control the stablecoin tech stack, they need to build:
– Up/Down channels (conversion between fiat and cryptocurrency).
– Stablecoin issuance (e.g., Tether’s annual profit of $10 billion).
– Complex stablecoin infrastructure (involving more than 20 blockchains, more than 10 stablecoins, etc.).
They can 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). The founding team includes @zcabrams, former Chief Product Officer at Brex, and Sean, an engineer at Airbnb.
Their vision is to build various types of stablecoin APIs.
Initially, they operated by helping businesses accept stablecoin payments and building 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).
Over the past two and a half years, they have developed the following APIs:
– Swap (up/down channel conversion, converting any form of USD into other forms, e.g., converting USDC on Solana to USD).
– Mint (minting stablecoins and investing reserves).
They have processed 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 many up/down channels and cryptocurrency card 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 that offers up/down channels and stablecoin infrastructure.
Why choose Bridge?
– Prioritize API integration with Stripe’s tech stack.
– Potential to acquire competitors (e.g., integrating Bridge into stablecoin fintech companies planning to disrupt Stripe).
– Offer complementary products (e.g., treasury services with stablecoin issuance, BaaS with cryptocurrency acceptance).
– Share common investors: Sequoia and tech founders in San Francisco.
– Have a concise social media username: @stablecoin
Thanks to @gizmothegizzer for the contribution.
So, why spend $1.1 billion?
Mainly because the team is strong – the founders have held leadership positions or worked at top startups like Airbnb, Brex, Coinbase, and Square – making them the best choice to lead “Stripe Cryptocurrency Infrastructure.”
Licenses, products, market attractiveness, and customer base.
I speculate that the deal will be equity-based rather than cash-based.
From a strategic perspective, acquiring Bridge helps:
– Compete faster with crypto-friendly giants like BlackRock, Revolut, and PayPal.
– Achieve 24/7 global operations and overcome limitations of localized payment systems (Stripe faced significant challenges when expanding into long-tail markets like Asia and Latin America).
Stripe’s next moves? My guess:
– Continue to support up/down channels and acceptance of cryptocurrencies while mastering Bridge’s APIs.
– Deepen the development of stablecoin infrastructure, enabling global fintech companies to launch stablecoins, and possibly issue their own stablecoin, STUSD, for complete control of 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 mergers and acquisitions are expected).
– It is also Stripe’s largest acquisition (demonstrating their grand vision for cryptocurrencies).
Will this become a historic great acquisition like Instagram and truly elevate the internet’s GDP?
This article is a collaboration and is reprinted from:
Deep Tide