The largest acquisition in crypto history: Bridge's market value increased by $900 million in two months, Stripe enters the crypto payment space

Author: Xiyou, ChainCatcher

Editor: Nianqing, ChainCatcher

On October 21, the unicorn in the payment sector, Stripe, finalized its acquisition of the stablecoin platform Bridge for $1.1 billion. This marks the largest acquisition deal in the history of the cryptocurrency industry and is also Stripe's largest acquisition to date.

As a beneficiary of this acquisition, Bridge aims to provide a platform that integrates stablecoin payment technology support for businesses. Just in August of this year, it announced the completion of a $54 million financing round, with a valuation of only $200 million at that time. However, in just two months, Bridge's market value skyrocketed nearly sixfold, ultimately being acquired by Stripe for the high price of $1.1 billion, making it one of the fastest-growing projects in the crypto world.

As the funding party for this acquisition, Stripe recently resumed support for USDC cryptocurrency payments on Ethereum, Solana, and Polygon at the beginning of this month. The acquisition of Bridge will undoubtedly add a sharp edge to Stripe's capabilities in the field of crypto payments. What remarkable new changes can we expect in the crypto payment sector from this powerful collaboration?

From a $200 million valuation to an $1.1 billion acquisition, Bridge took only 2 months

Bridge was co-founded by Zach Abrams and Sean Yu, aiming to help businesses accept stablecoin payments. The platform provides a range of software tools (such as API interfaces) for developers to facilitate seamless conversion between fiat currencies and stablecoins, supporting businesses in integrating cross-border payments and exchanges based on stablecoins, and even allowing businesses to issue their own stablecoins.

Both founders, Zach Abra and Sean Yu, previously held positions at Coinbase as consumer leads and senior engineers, respectively. Zach Abra was also the general manager of the mobile payment platform Square. Before joining Coinbase, they worked on a P2P payment project called Evenly in 2012, which was later acquired by Square. In 2022, they teamed up again to create Bridge.

In August of this year, Bridge announced the completion of a $58 million financing round, with investors including Sequoia Capital, 1confirmation, Index, Haun Ventures, Ribbit Capital, and others. This was also Bridge's first public appearance, garnering attention from the crypto community.

In the financing news, Bridge stated that stablecoins represent a new form of payment that can address issues such as the lack of uniformity in cross-border payment methods for global businesses, reliance on intermediaries, high costs, and inflation. Many members of the Bridge team previously worked at Coinbase and participated in the development and promotion of the first compliant US dollar stablecoin, USDC, which has seen payment volumes exceed billions of dollars. They firmly believe that stablecoins will improve global economic issues.

Bridge is building an API for stablecoin orchestration and issuance services. The orchestration service API allows for easy conversion between any two dollar formats (USD/EUR, USDC, PYUSD, USDT, etc.); the issuance service empowers developers to convert any of these dollars into stablecoins that they can customize and benefit from. The orchestration and issuance APIs enable any company or team to provide digital dollar-based services to their end consumers or businesses.

For example, a company in Brazil can use Bridge to send USDC payments to their suppliers in China, consumers in Nigeria can pay for YouTube or ChatGPT, and small businesses in the U.S. can receive PYUSD and other stablecoin payments from customers around the world. Since Bridge is built on blockchain technology and operates 24/7, it allows multinational businesses to quickly repatriate funds to their home countries, with settlement times of less than 30 minutes, compared to 2-3 days for traditional payment methods, and at a cost of less than 10% of traditional foreign exchange.

According to investor Sequoia Capital, Bridge's annualized payment volume has exceeded $5 billion, with clients including government departments such as the U.S. State Department and the U.S. Treasury, as well as companies like SpaceX and Coinbase.

On October 16, Bloomberg reported that payment company Stripe was negotiating to acquire the stablecoin platform Bridge for up to $1 billion and had entered the final stages. Five days later (on October 21), TechCrunch founder Michael Arrington posted on the X platform that Stripe ultimately acquired the stablecoin platform Bridge for $1.1 billion.

According to sources, the $54 million financing announced by Bridge in August included a previous $40 million Series A round, at which time the company's valuation was $200 million. Bridge may have received interest for Series B financing at a higher valuation.

From a $200 million valuation in August to an $1.1 billion acquisition in less than two months, Bridge has set a record for the fastest value growth in crypto history.

Acquisition of stablecoin Bridge is also Stripe's largest acquisition to date

The acquisition amount of "$1.1 billion for Bridge" is not only the largest acquisition case in crypto history but also Stripe's largest acquisition to date.

In recent years, Stripe has made several acquisitions, although not many transaction details have been disclosed. According to data company PitchBook, in 2021, Stripe acquired the tax data software TaxJar, valued at $179 million; in July of this year, Stripe acquired the cross-border payment service provider Lemon Squeezy.

As a unicorn in the payment industry, Stripe's valuation once soared to $95 billion, even surpassing Elon Musk's space exploration company SpaceX (valued at $74 billion), making it the most valuable private startup in the U.S.

Stripe was one of the first major payment companies to allow Bitcoin as a payment method, but in April 2018, it stopped supporting Bitcoin due to factors such as high volatility and long transaction times associated with cryptocurrencies.

After six years, in April of this year, Stripe announced the resumption of support for cryptocurrency payments, launching global support for USDC transactions. It subsequently announced a series of news related to USDC payments and collaborations with Coinbase, including integrating Coinbase's Layer 2 network Base and adding Stripe's payment products to the Coinbase wallet, allowing users to purchase digital assets directly in the Coinbase wallet using credit cards or Apple Pay.

At the beginning of October, Stripe announced a new feature called "Pay with Cryptocurrency," which allows businesses to accept stablecoin payments and automatically settle in fiat currency in their Stripe balance. Businesses can now accept USDC payments on the Ethereum, Solana, and Polygon networks, with payments settled in dollars in the businesses' Stripe account balance. This new feature simplifies the payment process for cross-blockchain stablecoins, allowing businesses to integrate crypto seamlessly without having to hold or convert cryptocurrencies, thus avoiding direct exposure to market volatility.

Stripe's acquisition of the stablecoin Bridge platform undoubtedly represents another strategic move in the crypto payment sector. Acquiring Bridge will support the company's further involvement in stablecoins and cryptocurrencies linked to other currencies or financial instruments, further solidifying its market position in the stablecoin space. Currently, the stablecoin market has a market capitalization of $170 billion and is growing rapidly, becoming an important component of online payments. Through this acquisition, Bridge will occupy a larger market share in the crypto ecosystem.

Stripe's acquisition of the stablecoin platform Bridge for $1.1 billion is not only the largest acquisition deal in the crypto sector to date but also a significant transformation in the payment industry. This acquisition will not only drive innovation in payment methods but also achieve large-scale adoption of stablecoins and other cryptocurrencies in mainstream financial services.