Sequoia Capital collects 100 million dollars thanks to the acquisition of Stripe

According to Bloomberg, the venture company Sequoia Capital is about to earn a staggering amount thanks to the acquisition of Stripe.

The electronic payments company has indeed just completed the acquisition of Bridge, a stablecoin platform, on which Sequoia boasts a 16% stake.

This means that the VC will cash in more than 100 million dollars from the deal.

The recent acquisition of the company Bridge by Stripe

Before talking about Sequoia Capital and its latest big move, let’s go over the recent acquisition of the Bridge platform by Stripe.

As reported on October 20 by Michael Arrington, founder of Techcrunch, the electronic payments company would have concluded the negotiations by formalizing the transfer.

Overall, Stripe will pay 1.1 billion dollars to Bridge: an enormous amount if we consider that until recently the platform was worth about 200 million dollars.

This is in fact the largest financial agreement in the history of Fintech.

The offer from Stripe came 6 months after the company’s co-founder, John Collison, had explicitly stated his intention to implement stablecoin into their service.

The presence of Bridge, founded by Sean Yu and Zach Abrams, ensures in this sense an effective software for the aid of the management of stable crypto coins.

This financial platform had grown rapidly in recent years, with a balance sheet performance of 14 million dollars.

With the compravendita, Stripe brings its valuation to 70 billion dollars, reflecting its growth and strategic positioning in the crypto world.

This is a very important step for the group, which after introducing crypto payments with USDC (after the 2018 stop) is now aiming for expansion.

Overall, the stablecoin market is worth about 170 billion dollars.

We remind you that the acquisition is still pending regulatory approval and will likely be finalized in the coming months.

Sequoia receives a compensation of 100 million dollars from the acquisition of Stripe

The acquisition of Bridge would also have implications for the Venture company Sequoia Capital, a well-known figure within the web3 sector thanks to its numerous investments.

As reported by Bloomberg, Sequoia allegedly bought a 16% stake in the stablecoin platform in the last year through a series A round.

Now the Californian company is therefore about to collect an amount worth over 100 million dollars, being a shareholder of Bridge.

This is a big hit with a ROI of about 400%, considering the investment of 19 million dollars by Sequoia.

The VC, based in Menlo Park, California, is a leader in the crypto startup market with 2,046 investments made according to CrunchBase data.

Of these, he has led 762, leveraging his workforce with a staff of 160 individuals and the 52 different active technologies for financial analysis.

Together with Sequoia, other companies have also seen their stake in Bridge pay off.

Ribbit Capital, Haun Ventures, Index Ventures, and Bedrock Fund Management are just a few of the companies that have funded the stablecoin platform in the past, and now they are reaping the rewards of their commitment.

The participation of Ribbit in Bridge is about 10% and is worth about 100 million dollars

Instead, Bedrock and Index Ventures both own about 6%, valued at 60 million dollars, while Haun Ventures comes out with 40 million dollars.

According to these estimates, Sequoia should collect at least 150 million dollars.

VC investments in the crypto sector decrease

The jackpot of Sequoia comes at a time of severe crisis for VC investments in the crypto sector, where the holdings show unconvincing numbers.

Compared to the boom of Q1 2021, where 12 billion dollars of invested capital were reached, now the industry sees numbers down by 80%.

Various companies involved in these activities have faced quite a few difficulties while others have been forced to venture elsewhere. Despite this, the earnings still come for those like Sequoia who choose the right horses and connect with Stripe.

We still remember that in the crypto world, the great investment returns come much more easily for the VC compared to the retail.

In the third quarter of 2024, crypto VC investments decreased by 20% falling to 2.4 billion dollars, highlighting the complex moment.

The market is indeed driven by the numbers of Bitcoin and the high-risk memecoin sector, as stated by analysts from Galaxy Digital. BTC and meme coins are indeed the only categories that have had noteworthy performances since the beginning of the year.

“The stagnation of venture capital is due to several factors, including a ‘barbell’ market that has seen Bitcoin at the center stage and new marginal net activity coming from memecoins, which are difficult to finance and have questionable longevity.”

The decline in capital flows is also accompanied by a 17% reduction in agreements, with 478 completed during the third quarter.

The hope is that after Sequoia’s big move, other VCs can take on greater risk and become active again as in the last bull market.