A $1.1 billion deal between Stripe and crypto firm Bridge represents a much-needed victory for venture capitalists.

• Bridge Network's $1.1 billion acquisition by Stripe has led to a 200% increase in valuation since August, resulting in firms such as Index Ventures and Haun Ventures cashing in.
• At Index, Chris Ahn led the deal, and is now a partner at Haun.
• Ahn recounted a 2022 trip he made to visit the founders in northern Montana, stating that he was the only one who had flown out to see them in person.

In March 2022, Chris Ahn, a venture capitalist, was actively seeking to invest in a promising crypto startup that aimed to simplify business transactions through digital currencies.

Ahn flew to a small town in northern Montana with a term sheet for founders Zach Abrams and Sean Yu, who had previously worked at both and .

In an interview on Tuesday, Ahn, who was a partner at Index Ventures at the time, stated that nobody else had flown out to see them in person.

The three of them hiked together on a path with melting snow, and then conversed over drinks and dinner, as Ahn aimed to convince the founding duo that they should take Index's money. At the restaurant, he looked to seal the deal.

"Ahn stated that he informed his colleagues of his plans to visit the bathroom, then hurried to his car to retrieve the term sheet and returned. He explained that it was challenging to fit a piece of paper into a jacket without causing it to tear, and he didn't want to present them with a crumpled document."

Bridge secured investment from Index in its seed round in 2022, and later in August of this year, the firm was part of a more recent round that included Sequoia and Ribbit Capital, valuing Bridge at about $350 million, according to a source who requested anonymity. Additionally, Haun Ventures, founded by former Andreessen Horowitz partner Katie Haun, was also involved in the deal.

In 2022, Ahn left Index to join Haun, and now both his old firm and his new employer are celebrating after Stripe agreed to buy Bridge for $1.1 billion. This outcome means that Index and Haun are set to triple their investment in a matter of months.

An Index spokesperson declined to comment.

Notably, venture investors have exited during an extended IPO drought, resulting in a significant victory for crypto, which has seen few exits despite substantial cash inflows into the industry.

The Bridge acquisition will be Stripe's largest purchase to date, with regulatory approvals and other conditions still subject to completion. The transaction is expected to close in the coming months.

'Serious about stablecoin'

Bridge is the Stripe of crypto, simplifying the process for businesses to accept stablecoin payments without directly dealing in digital tokens. Stablecoins are a type of cryptocurrency whose value is tied to a real-world asset, such as the U.S. dollar. Customers include PayPal and SpaceX.

"Stripe's focus on stablecoins and crypto indicates its commitment to the use case of payments, which is finally being realized."

Stripe is paying a hefty premium.

According to investors knowledgeable about Bridge's financials, annual revenue is estimated to be between $10 million and $15 million. At the lower end of the range, this represents a revenue multiple of approximately 110, while at the higher end, it is a revenue multiple of over 70.

Ahn stated that the value of Bridge lies in the fact that it is challenging for companies to utilize this new stablecoin technology without developer tools that simplify its use.

According to Nic Carter of Castle Island Ventures, Bridge is the most successful stablecoin infrastructure business globally, except for issuers such as Circle and Tether.

""Bridge is a widely used platform for stablecoin startups, with most of them utilizing it for orchestration or issuance," Carter stated."

In 2021, Stripe's valuation was $95 billion, but it dropped to $50 billion in 2022 due to the recalibration of public markets. However, its valuation rose to $70 billion this year through a secondary share sale.

Stripe co-founders Patrick and John Collison, who founded the company in 2010, have no plans to go public and have not given any indication of an IPO in the near future. Despite having a massive business, with total payment volume exceeding $1 trillion in 2023, the brothers have kept their focus on growth and expansion.

The company has provided liquidity to early investors and employees through other means due to the private market demand for its stock.

""If I'm the Collison brothers and I'm sitting around the table, I'm wondering why I would want to go public when the private markets are providing capital and secondary liquidity, rewarding me with public market premiums and valuations, and allowing me to have secondary sales to keep my employees happy," said David Golden, a partner at Revolution Ventures who previously led the tech investment banking practice."

Stripe directed CNBC to CEO Patrick Collison's post on X regarding the deal.

In his post, Collison referred to stablecoins as "financial services' room-temperature superconductors," and stated that Stripe plans to create the top stablecoin infrastructure.

The acquisition of Circle by Coinbase has been praised by Bernstein analysts, who believe it validates the use of stablecoins as a legitimate application for public blockchains in the $160 billion U.S. dollar-pegged market.

Chris Larsen, co-founder of Ripple, announced a $10 million donation to the Harris campaign, causing XRP to drop in value.

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