Sequoia Capital, a venture capital firm, is set to earn around $100 million after Stripe’s acquisition of Bridge for $1.1 billion. This is a significant return, especially in the crypto industry, where venture funding has decreased significantly since its peak in 2022. Other investors are also expected to receive substantial returns.
According to reports from Bloomberg, Sequoia invested $19 million in Bridge during its Series A funding round less than a year ago. This amount represents 16% of the stablecoin platform’s ownership, which could result in a $100 million profit when liquidated. Other firms that invested in Bridge, such as Ribbit Capital, Bedrock Fund Management, Index Ventures, and Haun Ventures, also hold significant stakes in the company and are expected to see similar returns.
Stripe announced its finalized $1.1 billion acquisition of Bridge on October 20. The platform, co-founded by Sean Yu and Zach Abrams, provides software tools for businesses to process payments in stablecoins. However, the deal is still subject to regulatory approval and is expected to close in the coming months. This billion-dollar acquisition is one of the largest in the crypto industry to date.
The interest from Stripe in Bridge was reportedly driven by the platform’s recent growth, which saw it reach a $14 million run rate. This metric is often used by analysts to project a company’s future performance based on its current financial data.
In contrast, a report from Galaxy Digital on October 15 showed that crypto venture funding dropped by 20% in the third quarter of 2024 to $2.4 billion. This decline was accompanied by a 17% decrease in deals, with only 478 reported in that period. Analysts from Galaxy Digital attributed this downturn to a “barbell market” in crypto funding, where investors have favored high-profile cryptocurrencies like Bitcoin and high-risk meme coins, often overlooking mid-sized projects seeking funding.
The report also noted that the strong demand for spot Bitcoin ETFs from major investors, such as pension and hedge funds, may have shifted focus away from early-stage crypto venture capital investments. However, despite the funding dip, Stripe’s acquisition of Bridge is a testament to the platform’s growth and potential in the stablecoin market.
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