As a seasoned financial analyst with over two decades of experience under my belt, observing the crypto market’s rapid growth and evolution has been nothing short of exhilarating. The news of Sequoia Capital making over $100 million from Stripe’s acquisition of Bridge, a stablecoin platform, is a testament to the potential of this burgeoning sector.
Sequoia, a prominent U.S. investment company, stands to earn over $100 million due to Stripe’s purchase of the stablecoin platform Bridge. The estimated cost for this acquisition by Stripe is said to be approximately $1.1 billion.
Based on a Bloomberg report dated October 29th, it’s been indicated that Sequoia and several other venture capital firms will make significant profits from their investments in the crypto startup, Bridge, due to its acquisition by Stripe. Sources close to the deal suggest that venture capitalists are poised to receive hundreds of millions of dollars as a result.
It’s due to the fact that Sequoia Capital holds around 16% of Bridge, as reported by various unnamed sources. This means that Sequoia’s stake in the crypto startup platform is valued above $100 million. This massive profit significantly outweighs Sequoia’s initial investment of $19 million, which they made when leading Bridge’s Series A funding less than a year ago.
On October 20th, Stripe, a well-known payment processing firm based in San Francisco, decided to acquire Bridge for approximately $1.1 billion. This substantial purchase has sparked renewed optimism among venture capitalists who are keen on investing in ventures related to cryptocurrency.
Sequoia isn’t the only venture capitalist poised to reap large sums from Stripe’s acquisition. Ribbit, another venture capital firm, holds close to a 10% stake in Bridge, which is valued at approximately $100 million. Additionally, Bedrock owns over 6%, Index Ventures has 6%, and Haun Ventures possesses around 4%.
Bridge is a three-year-old company that functions as a platform specializing in stablecoins. Stablecoins are digital forms of currency that maintain their worth by being connected to reliable assets, typically the U.S. dollar or other national currencies. This stability makes them ideal for everyday transactions.
As an analyst, I can share that, though still in its early stages, Bridge has managed to establish a run rate of approximately $14 million and continues to thrive at an impressive pace. This extraordinary growth was reportedly the key factor that drew Stripe’s attention, leading to their acquisition of the startup for a staggering $1.1 billion.
Beyond just the Bridge acquisition, it’s worth noting that Stripe has expressed an interest in various other stablecoin initiatives. On October 15th, Stripe formed a collaboration with Paxos to incorporate Circle’s USDC (USD Coin) stablecoin into its “Pay with Crypto” feature. This partnership enabled merchants in over 70 countries to process payments using this stablecoin.
Earlier, Stripe has demonstrated engagement with the cryptocurrency market by participating in various projects. For instance, creators on platform X were enabled to receive payments in USD Coin (USDC) previously. Additionally, Stripe launched a fiat-to-crypto ramp service around the year 2022.
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2024-10-29 10:58