Update: A reputable source reported one hour ago as of this update that Stripe, Inc., just completed an acquisition of Bridge for a reported $1.1 billion USD. Three days prior, it was ‘leaked’ that Stripe and Bridge were in advanced talks of an acquisition. Additionally, this comes after a series of announcements from Stripe embracing cryptocurrencies as a viable, easy addition to their suite of payment options, such as adding native USDC payments to all Stripe vendors (speculatively, done via Bridge infrastructure). A positive indicator for the coming global adoption of onchain payment technologies, stablecoins and specifically Circle (USDC/EURC).
The company, Bridge Ventures, just raised a staggering $56M round over 2 years from reputable and prominent venture capital firms, including, but not limited to: Sequoia, Ribbit, Index and Haun Ventures.
Bridge Ventures (website bridge.xyz, reportedly sold for $120K in 2022, the 6th highest .xyz domain sale ever at the time), is not a company that would typically get venture capitalists excited. It’s actually an extremely bad pitch.
Bridge is dealing with money transmission in several areas of the world, which also means dealing with a lot of compliance, risk assessment and management and obtaining said licenses — often a costly process.
That means, what you’re pitching to, for example, Ribbit or Haun is:
- Years worth of legal fees for licensing approval.
- Ongoing compliance maintenance cost.
- A ridiculous amount of time from raise to launch.
- Continued risk, which has to be well-managed to not lose your licensing.
- Finding a partnership in all regions with a bank.
- And a million other hurdles that you’re only aware of in the thick of it.
Doesn’t sound like something a VC would be excited about right? Well, the difference between anybody else pitching this and Bridge is their founder, Zach Abrams, who is ex-lead product designer at Brex (a large US bank serving a broad spectrum of clients, including crypto) and ex-Coinbase.
Zach has managed to do the (near) impossible, obtain solid licenses in the 2 major jurisdictions: the United States and Europe, where they are both permitted to transmit large sums of money and exchange currencies on behalf of users, essentially, a ramp.
One, for the Eurozone (EU/EEA) is located in Poland, and another for the US DE C-corp is located in Berkeley, California. The US C-corp has a money transmitter license (MTL) approved in 22 states, but don’t fret, it looks like they’re far from done; in 2024 alone, Ohio, North Dakota, North Carolina, New Mexico, Maine, Louisiana, Illinois, and the District of Colombia has issued them a MTL.
For Poland, they have an MTL-equivalent. A license to:
exchange between virtual currencies and means of payment exchange between virtual currencies intermediation in exchange [kas.gov.pl]
This license “passports” to EU/EEA so no further licensing is required in Europe.
Which was issued on the 13th of November 2023. Which means cumulatively, for preparation of documents, filings, and then waiting time would’ve taken the brunt of the 2.5 years they’ve been building out Bridge.
It’s also worth mentioning that in areas where Bridge aren’t compliant yet, they’re partnering with companies who are to provide better coverage for their service. For example, Bitso, for B2B payments in Latin America.
Okay — why should I care?
Well, if you’re an ordinary user of onchain apps. You shouldn’t. You might notice more onchain services offer crypto to banking services, but other than that, it will only positively effect your experience in crypto.
If you are a company it’s huge.
If you pay your employees in USDC, you can now do payroll, fully ledgered on-chain (no more messy PDFs) via a company utilizing Bridge’s services like SpherePay which I did a tweet on.
The point of Bridge itself is to be a silent API, middleware so-to-speak, between your crypto and your bank account. You probably won’t interact with Bridge directly anytime soon, but I can guarantee you, if you’re offramping in the near future, there’s a good likelihood the route is through their system.
The Stripe of Crypto
The stated goal of Bridge, is to “become the Stripe of crypto”, meaning to offer a multi-faceted array of payment options (card payments, SEPA, ACH and Wires). An ambitious goal for sure, but if there’s one thing Bridge has proven, it’s that they’re able to accomplish regulatory milestones with (what some would call “speed” within) compliance licensing matters.
Take SpherePay for example, some of their routes use Bridge. I was able to receive a feeless transfer, on a Saturday.
Bridge, SpherePay and many others also work directly with Circle, the issuer of USDC and EURC, making everything related to the handling of these near-feeless.
From 2019-2022 this would’ve been near impossible to do with this amount of competence, implementation, coverage and secure forward reliability as banks were much more risk averse when it came to cryptocurrencies, and many outright issued a ban.
Thanks to the $56M worth of funding Bridge has received over their 2-year compliance marathon, they’ve ensured 3 things:
- A paradigm-shift in how people perceive crypto, and its barriers to entry and exit.
- Almost ensured longevity as they have a war chest should any regulatory issues come up.
and perhaps most importantly, due to large B2B settlement limits; - A new route for traditional finance to enter the crypto space, and subsequently offramp profits, in a simple, unified experience.
So I would suggest, even if they are not the ‘main portal’ through which you use their service, to go follow @StableCoin (their brand new handle as of a few hours ago), to keep up with their regulatory (SEA + Oceania is noticeably missing) developments, as well as (hopefully) new product offerings (for example, virtual/physical cards in the Eurozone).
Final remarks
The downstream effects of their B2B flow, their large settlement limits, great compliance, and speed cannot be understated. The consumer-facing routes used by auxiliary non-related entities are a huge quality of life improvement right now, but for institutional use, I believe Bridge is going to play a huge, if not the ultimate role, in ensuring funds are never stuck on or offchain.
A huge congratulations once again to Zach, the Bridge team, the VCs with conviction in traditionally “boring” plays, and ultimately to the onchain ecosystem in general.
We’re already seeing major usage of these ramps on the Base network.