Stripe closes $1.1 billion Bridge deal, prepares for stablecoin push

SAN FRANCISCO — What started as a casual roundtable at Stripe’s headquarters to discuss issues facing fintech companies turned into a billion-dollar acquisition that could become a defining moment for the industry.

Last summer, Stripe hosted Wally Adeyemo, who was then deputy secretary of the Treasury Department, for a chat with a number of financial services providers. Among the attendees were Stripe CEO Patrick Collison and Bridge co-founder Zach Abrams. The two entrepreneurs had never met.

Abrams, whose startup specialized in stablecoin infrastructure, said the session surprised him, as it quickly morphed into a conversation specific to his company.

“It was shocking to me,” Abrams told CNBC this week, recalling the event. The group “spent 90-plus percent of the meeting talking about stablecoins — even though we were the only stablecoin company” in the room, he said.

By the end, Bridge was firmly on Stripe’s radar. Months later, that initial meeting led to Stripe’s biggest acquisition to date, a $1.1 billion purchase of Bridge. The deal, which closed Tuesday after clearing regulatory hurdles, gives Stripe a firm foothold in crypto, a market where it previously struggled to gain traction.

“In the course of us spending time together, he probably developed more of an understanding of our business,” said Abrams, who co-founded Bridge in 2022. “And I think there was a growing excitement around the ways that our business can grow, and probably the ways our business could help support and grow the Stripe ecosystem.”

Bridge’s roughly 60-person team convened in San Francisco on Tuesday for the official onboarding. The newcomers were introduced to Stripe’s culture with a crash course on how to write like a Stripe employee and an intro to the business from Collison.

It’s all part of Stripe’s standard fintech boot camp, a program that runs every two weeks for new hires.

Bridge focuses on making it easier for businesses to accept stablecoin payments without having to directly deal in digital tokens. Stablecoins are a type of cryptocurrency whose value is pegged to the value of a real-world asset, such as the U.S. dollar. Customers include Coinbase and SpaceX.

Companies across the financial services landscape, from legacy banks to startup payment providers, are adopting stablecoins or exploring launching their own because they make it easier and cheaper to switch between currencies and to move money digitally. Standard Chartered predicted in a recent report that stablecoins could grow to become about 10% of foreign exchange transactions, up from 1% today.

Prior to Abrams’ first interaction with Collison at the roundtable, Bridge had been aggressively courting Stripe as a customer, hoping to integrate its technology into the payment giant’s ecosystem. As the two CEOs spent more time together in the weeks that followed, Collison’s interest in Bridge deepened.

Stripe had already taken a shot at crypto — and failed. It was one of the first major fintech firms to support bitcoin payments in 2014, but pulled the plug in 2018, citing scalability issues and high transaction fees. Still, the company insisted at the time that it remained “very optimistic about cryptocurrencies overall.”

Stablecoins would be Stripe’s next foray. At its flagship Sessions conference in April, the company said it would enable merchants to accept stablecoins for online purchases. In its first week of the offering, Stripe saw more stablecoin volume than in its entire history of offering bitcoin transactions.

However, Stripe was still missing a key component to make it all work. It needed a way to seamlessly handle cross-border transactions.

That’s precisely what Bridge offered, said Neetika Bansal, Stripe’s head of payments.

“If you think about Stripe and what we’ve focused on for the past seven years — what I personally have focused on — it’s been about breaking down the barriers for global commerce,” Bansal told CNBC in an interview at Stripe’s office. “We’ve done it, to a large part, on traditional financial rails.”

Stripe’s approach to global payments for years involved navigating the complex regulatory and operational challenges in each market it entered. Bridge had developed “a super elegant solution to cross-border use cases” and had “meaningful traction with companies of all sizes,” Bansal said. “It just felt almost like a no-brainer to go and acquire them.”

Stripe paid a hefty price for a two-year old company, an amount that was about three times higher than Bridge’s valuation in a funding round in August.

Bansal framed the acquisition as a strategic step toward modernizing Stripe’s global money movement capabilities.

“We are working very closely together to figure out the right opportunities, where we should power our products with Bridge and, in fact, where we should do new product development on Bridge infrastructure,” she said. “That’s what the next few weeks look like.”

Stripe processes millions of cross-border transactions daily, a segment that’s growing 50% annually. Bansal said stablecoins could meaningfully reduce costs and streamline transactions compared to traditional financial networks.

Bansal used as an example a company in the U.S. paying a contractor in the Philippines, which she called “a common use case as company workforces are going global.”

Stripe has partnered with Remote.com, a global human resources and contractor platform, to process payouts using stablecoin infrastructure in more than 70 countries. Bansal said she sees stablecoins playing a growing role in foreign exchange and treasury management for large enterprises.

For now, Bridge will continue running its existing products, but the teams are working together to determine the best integrations and explore new products that can be built on Bridge’s technology.

“They’re clearly a leader in the space,” Bansal said about Bridge. “A lot of our conversations are about absorbing what Bridge has learned about stablecoins.”

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