Sequoia Capital to Earn $100M From Stripe’s $1.1B Acquisition of Bridge

Venture capital firm Sequoia Capital stands to make approximately $100 million following Stripe’s $1.1 billion purchase of Bridge.

The substantial return is particularly notable in the crypto sector, where venture funding has significantly declined since its peak in 2022.

Other Investors Also Set for Major Returns

According to reports from Bloomberg, Sequoia invested $19 million in Bridge during its Series A funding round that took place less than a year ago. The amount translates to 16% of the stablecoin platform’s ownership, which, when liquidated, could result in a $100 million windfall.

Other firms that invested in Bridge also stand to make significant returns. Ribbit Capital, which holds close to 10% of Bridge, expects a return similar to Sequoia’s. Bedrock Fund Management and Index Ventures hold about 6% each, and Haun Ventures maintains a 4% stake in the company.

Stripe announced its finalized $1.1 billion bid for Bridge on October 20. The platform, co-founded by Sean Yu and Zach Abrams, offers software tools for businesses to process payments in stablecoins. However, the transaction is still pending regulatory approval and is expected to close within the next several months.

The billion-dollar deal comes just half a year after John Collison, co-founder of Stripe, promised that the company would support stablecoins by mid-2024. His firm’s takeover of Bridge ranks as one of the largest in the crypto sector to date.

Crypto VC Funding Dropped 20% in Q3, 2024

According to an October 15 report from Galaxy Digital, crypto venture funding fell 20% in the third quarter of 2024 to $2.4 billion. This drop was accompanied by a 17% decrease in deals, with only 478 reported in that period.

Analysts from Galaxy Digital attributed the downturn to a “barbell market” in crypto funding. In this scenario, 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 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 interest in Bridge was reportedly triggered by the latter’s heightened growth in recent months, which saw it hit a $14 million run rate. Analysts often use this metric to project a company’s future performance using its current financial data.