Striped logo on smartphone with dollar bills in the background.
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In March 2022, venture capitalist Chris Ahn was pushing to get into a hot crypto startup that is trying to make it easier for businesses to transact in digital currencies.
The company is Bridge Network. As part of the promotion, Ahn flew to a small town in northern Montana with a term sheet from founders Zach Abrams and Sean Yu. Everyone has been there Coin Library and clogged.
“No one else flew out to meet them in person,” An, then a partner at Index Ventures, recalled in an interview Tuesday.
The three of them hiked together on the path where the snow had melted, and then drank and had dinner. Ann’s purpose was to convince the founders to accept Index’s money. At the restaurant, he hoped to seal a deal.
“I told them I was going to the bathroom, and I ran to my car, grabbed my term sheet and came back,” An said. “It’s hard to put a piece of paper in a jacket without breaking it, and I didn’t want to give them a crumpled piece of paper, so I left it in the car.”
Index received this investment and entered Bridge’s seed round in 2022. is valued at approximately US$350 million. The deal also includes Haun Ventures, a firm founded by former Andreessen Horowitz partner Katie Haun.
Ahn left Index in 2022 to join Haun. agree Acquired Bridge for $1.1 billion. With this result, Index and Haun are ready to triple their investment within a few months.
An index spokesman declined to comment.
It’s an especially noteworthy exit for venture investors during a long IPO drought and marks a major win for the cryptocurrency space, which has seen investors Very few.
Bridge’s acquisition would be the largest yet for Stripe, one of the most valuable tech startups. bridge says The deal, which remains subject to regulatory approvals and other conditions, is expected to close in the coming months.
“Take stablecoins seriously”
Bridge describes itself as the Stripe of cryptocurrency, focusing on making it easier for businesses to accept stablecoin payments without having to deal with digital tokens directly. A stablecoin is a cryptocurrency whose value is pegged to the value of a real-world asset such as the U.S. dollar. Customers include Coin Library and SpaceX.
“This shows that Stripe is serious about stablecoins and cryptocurrencies,” Ahn said. “Payments are the original use case for cryptocurrencies, and it’s finally here.”
Stripe paid a hefty premium.
Investors familiar with Bridge’s finances say annual revenue is between $10 million and $15 million. At the low end of the range, the multiple is 110 times revenue; at the high end, the multiple is more than 70 times revenue.
“What makes Bridge so valuable is that it would be difficult for companies to use this new stablecoin technology without the development tools that make the technology easy to use,” Ahn said.
Nic Carter of Castle Island Ventures said that while Bridge has competitors in the category, it is the most successful stablecoin infrastructure business in the world, excluding issuers such as Circle and Tether.
“Almost every stablecoin startup we talked to is building on Bridge in some way, whether it’s orchestration or issuance,” Carter said. “They’re everywhere.”
Stripe’s valuation plummeted from $95 billion in 2021 to $50 billion last year as private technology companies across the board took a major hit from the public market correction. its valuation It is said Shares have rebounded to $70 billion this year as part of a secondary stock sale.
Stripe Inc. CEO and co-founder Patrick Collison (left) smiles during a TV interview with Bloomberg Studio 1.0 on Friday in San Francisco, California, U.S., 2018 March 23.
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Stripe, founded in 2010 by brothers Patrick and John Collison, has deliberately avoided an IPO process and has not indicated that it will conduct an IPO in the near future. Their business is massive, with payments totaling over $1 trillion in 2023.
Given private market demand for the company’s shares, the company has been able to provide some liquidity to early investors and employees through other means.
“Private markets have been very generous in providing capital and secondary liquidity to shareholders. If I were the Collison brothers, sitting around the table, I would think, ‘Why should I go public?'” Partner and former leader of Revolution Ventures JPMorgan Chase Technology investment banking. “If the private markets are willing to reward you at premiums and valuations to underlying public markets and let you make secondary sales to keep your employees happy, why bother?”
When asked for comment, Stripe referred CNBC to the CEO Patrick Collison’s post on X About this deal.
In the post, Collison called stablecoins “the room-temperature superconductor of financial services” and said Stripe will build the best stablecoin infrastructure in the world.
Bernstein analysts are optimistic about what the deal means for the $160 billion stablecoin market, noting in a report that the acquisition “validates the use and growth of stablecoins as legitimate use cases for public blockchains.”
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