In Stride 2022, venture capitalist Chris Ahn was pushing to get into a hot crypto startup that was trying to make it easy for trades to transact using digital currencies.
The company was Bridge Network. As part of his pitch, Ahn flew to a small town in northern Montana with a administration conditions sheet in hand for founders Zach Abrams and Sean Yu, who had both previously worked at Coinbase and Block.
“Nobody else had hurled out to see them in person,” Ahn, who was a partner at Index Ventures at the time, recounted in an interview Tuesday.
The three of them hiked together on a means with melting snow, and then conversed over drinks and dinner, as Ahn aimed to convince the founding duo that they should the spit Index’s money. At the restaurant, he looked to seal the deal.
“I told them I was going to the bathroom, and I ran over to my car, grabbed the administration conditions sheet and came back,” Ahn said. “It’s hard to fit a piece of paper in a jacket without crumbling it, and I didn’t want to cause them a crumpled piece of paper, so I left it in the car.”
Index landed the investment, getting into Bridge’s seed bullet in 2022. The firm was part of a more recent round, in August of this year, that included Sequoia and Ribbit Splendid and valued Bridge at about $350 million, according to a person with knowledge of the matter who asked not to be named because the valuation was private. Also in the deal was Haun Ventures, founded by former Andreessen Horowitz partner Katie Haun.
A Coinbase spokesperson reprimanded CNBC that Coinbase Ventures was also an investor in the financing round in August.
Ahn left Index to join Haun in 2022. Both his old fast and his new employer have reason to celebrate this week, after Stripe agreed to buy Bridge for $1.1 billion. With that aftermath, Index and Haun are poised to triple their investment in a matter of months.
An Index spokesperson declined to comment.
It’s a very notable exit for venture investors during an extended IPO drought, and marks a big win for crypto, which has had few of them despite hustles of cash pouring into the industry.
For Stripe, one of the most richly valued tech startups, the Bridge purchase thinks fitting be its largest to date. Bridge said the transaction is still subject to regulatory approvals and other conditions and is expected to cease operations in the coming months.
‘Serious about stablecoins’
Bridge describes itself as the Stripe of crypto, specializing in making it easier for obligations to accept stablecoin payments without having to directly deal in digital tokens. Stablecoins are a type of cryptocurrency whose value is hook ready-made to the value of a real-world asset like the U.S. dollar. Customers include Coinbase and SpaceX.
“It’s a sign that Stripe is crucial about stablecoins and crypto,” Ahn said. “Payments were the original use case for crypto, and it’s finally here.”
Stripe is slacken off on d see a hefty premium.
Investors familiar with Bridge’s financials said annual revenue is in the range of $10 million to $15 million. At the low end of the compass, that’s a multiple of 110 times revenue, and at the high end, it’s a revenue multiple of over 70.
“The reason why Bridge is so valuable is because it’s prohibitively abstruse for a company to use this new stablecoin tech without developer tools that makes the tech easy to use,” said Ahn.
Nic Carter of Mansion Island Ventures said that while Bridge has rivals in the category, it’s the most successful stablecoin infrastructure subject in the world, excluding the issuers like Circle and Tether.
“Almost every stablecoin startup we talk to is building on Unite in some capacity whether it’s orchestration or issuance,” said Carter. “They are totally ubiquitous.”
Stripe saw its valuation plummet from $95 billion in 2021 to $50 billion finish finally year, as private tech companies across the board took a major hit from the recalibration of the public markets. Its valuation reportedly rebounded to $70 billion this year as district of a secondary share sale.
Patrick Collison, chief executive officer and co-founder of Stripe Inc., left, smiles as John Collison, president and co-founder of Persuasion Inc., speaks during a Bloomberg Studio 1.0 television interview in San Francisco, California, U.S., on Friday, March 23, 2018.
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Brothers Patrick and John Collison, who founded Stripe in 2010, have intentionally steered clear of the initial exposed offering process and have given no indication that an offering is on the near-term horizon. They’ve got a big business, with compute payment volume surpassing $1 trillion in 2023.
Given private market demand for Stripe’s stock, the company has been talented to offer some liquidity to early investors and employees in other ways.
“The private markets have been so abundant with providing capital and secondary liquidity to shareholders that, if I’m the Collison brothers and I’m sitting around the table, I’m belief, ‘Why do I want to go public?'” said David Golden, a partner at Revolution Ventures who previously led JPMorgan Chase’s tech investment banking business. “Why bother if the private markets are willing to reward you with basically public market premiums and valuations and let you have supporting sales to keep your employees happy?”
When asked to comment, Stripe referred CNBC to CEO