Highlights:
- Stripe handles all the responsibilities related to regulatory compliance and money transfers.
- With the help of Bridge’s platform, developers can create apps that handle stablecoin transactions with a fraction of the effort that would typically be needed.
Stripe Inc. plans to acquire Bridge Ventures Inc., a startup that develops platform for stablecoin transaction processing.
The financial terms of the deal are not disclosed by either of the firms. But according to a source, Stripe is spending USD 1.1 billion on Bridge. That’s more than five times what the business is said to have been valued at during a funding round earlier this year.
Many businesses need to be able to receive digital payments, but they don’t have the technical know-how to create the required software. Payment processing software must adhere to a lengthy number of cybersecurity and financial rules, which contributes to the task’s complexity. Other difficulties include the requirement to include interfaces with external banking infrastructure.
By automating those activities for developers, Stripe has become one of the most valuable businesses in the tech sector. Software teams don’t need to start from scratch when developing a payment processing system; all it takes is a few lines of code to incorporate the company’s platform into their apps. Stripe handles all the responsibilities related to regulatory compliance and money transfers.
Although Bridge focuses more on stablecoins, its business model is similar. These are digital assets that are linked to a particular currency or financial tool. With the help of Bridge’s platform, developers can create apps that handle stablecoin transactions with a fraction of the effort that would typically be needed.
Some businesses accept stablecoin payments from customers using the startup’s software. Others use Bridge to handle international transactions. Furthermore, the company offers a tool that enables developers to invest user funds in the U.S. Treasuries and produce their own stablecoins.
Chief Technology Officer Sean Yu and Chief Executive Officer Zach Abrams formed Bridge in 2022. The duo had previously developed the payment software Evenly, which Block Inc. purchased in 2013. Yu has held technical positions at Square Inc., Airbnb Inc., and other tech companies, while Abrams later became the President of Coinbase Inc.’s consumer business.
Stripe offered cryptocurrency compatibility to its payment processing platform a few months prior to the purchase. A comparable feature was introduced by the corporation in 2018; however, it was discontinued due to technical hindrances.
Stripe has created a foothold in several markets to sustain its revenue growth, the most recent of which is the stablecoin category. The company, which purportedly makes over USD 2.5 billion a year, has already introduced technologies that streamline the incorporation process and automate accounting tasks. For processing financial logs from its platform, Stripe also provides data analytics tools.
In the upcoming months, Stripe anticipates completing the Bridge acquisition.