Does Stripe's Acquisition Of Bridge Signal That Startup M&A Is Back? | Techmeme Ride Home Podcast
Finally today, I don’t think we mentioned that Stripe acquired a stablecoin infrastructure company called Bridge for around $1.1 billion dollars. I’m highlighting this deal because it speaks to one of the reasons VC investing is frozen at the moment. We know the IPO environment is anemic, but so is the M&A landscape. The major tech platforms can’t acquire tons of young startups cause the regulators won’t allow it. But also, since private companies are sort of stuck without liquity event visibility, they’ve not been acquiring companies either, thereby shutting off another route for startups to cash out. So here, with Stripe and Bridge, we have a rare, at least recently, example of healthy M&A. And listen to what that sort of thing can mean. Quoting Bloomberg:
Firms including Sequoia Capital, Ribbit Capital, Bedrock Fund Management, Index Ventures and Haun Ventures all saw their investments in the startup pay off many times over. The investments represent an unusually quick turnaround for VCs, particularly with the startup market mired in a post-pandemic slump. Bridge was less than three years old when Stripe agreed to buy it.
The leader of the pack was Sequoia, which owns close to 16% of Bridge, said multiple people, who asked not to be identified discussing private information. Sequoia’s stake in the startup is worth significantly more than $100 million dollars, a substantial return on the $19 million it invested when it led Bridge’s Series A funding less than a year ago. That deal was led by Sequoia partner Shaun Maguire, who also took a board seat at the startup. Sequoia declined to comment.
Ribbit owns close to 10% of Bridge, two people said, a stake worth about $100 million. Other investors included Bedrock, with a stake of more than 6%, and Index, at about 6%. The crypto-focused venture firm Haun Ventures had a stake of about 4%.
Bridge operates a platform for stablecoins, a type of crypto typically designed to track the value of currencies or assets such as dollars one-for-one. The startup attracted Stripe’s attention in part because of its rapid growth, one of the people said. The business recently reached about a $14 million run rate and continues to accelerate, said the person. ENDQUOTE
Yeah, worth underlining that this is good news for the crypto investment space as well, though, as we’ve been saying, it’s stablecoins that seem to be the big winners at the moment.