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Stripe on Thursday announced that it is now supporting cryptocurrency businesses and has already onboarded well-known names, including FTX, Blockchain.com and Nifty Gateway.

Why it matters: For Stripe — known for powering payments in much of the startup ecosystem — the move into crypto plugs a noticeable hole in its customer base. 

For crypto lovers, the payments darling having their back is yet another signal that crypto is going mainstream.

Context: Stripe has long been bullish on crypto, but has struggled to find a business rationale for the asset class and has historically considered companies in the space risky.

In 2018, Stripe ended support for payments made in bitcoin, saying the rising value of the cryptocurrency made it less useful for such transactions.

Stripe previously barred many cryptocurrency and mining businesses from its services, saying the sector posed “elevated financial risk.”

That began changing late last year amid a frenzy of crypto deal-making. 

Stripe signaled it was getting back into crypto by making hires in October and adding Paradigm's Matt Huang to its board in November.

Be smart: This isn't Stripe full-on body-slamming into the crypto industry — at least not yet.

The announcement centers on how exchanges, NFT companies and wallet providers can use Stripe’s existing products to buy crypto and NFTs using debit cards and ACH bank transfers; for fraud mitigation; and for handling compliance.

"To date, the crypto industry has struggled with poor reliability and low authorization rates when it comes to accepting fiat payments," a Stripe spokesperson wrote in an email.

What we’re watching: Whether Stripe finds a way back into crypto-native payments. 

Crypto proponents say using the asset directly for payments is faster, cheaper, and has the potential to disrupt Stripe itself. But the technology has yet to replace existing rails.

On Thursday, the Stripe page introducing its web3 push included a line about "easy-to-use integrations for stablecoin payouts." 

Industry watchers took that as a potential sign of a return to crypto payments using stablecoins.

That reference disappeared on Friday, and Stripe declined to comment.

Zooming out: Yes, multiple payments players can coexist here, with companies often using several providers. But there's maybe just a touch of 🌶️spice🌶️  here, too. 

Competitor Checkout.com moved earlier and faster into the crypto-infrastructure space, with such clients as MoonPay, Coinbase and, yes, FTX.

1 big thing: Stripping down Stripe's crypto push

Illustration of the Stripe logo with the S as a dollar sign.

Bessemer Venture Partners threw its hat in the Web3 ring on Thursday, announcing a $250 million commitment to invest in founders building the future of crypto, NFTs, and DeFi — and a DAO to support them.

Why it matters: If a VC doesn't have a dedicated crypto fund these days, it at least has to have a crypto strategy. This is Bessemer's way of reminding the market that it, too, wants to put money into web3 startups.

Driving the news: The firm is committing money and a dedicated team of investors — Ethan Kurzweil, Charles Birnbaum, Talia Goldberg, and Jeremy Levine — to look for opportunities in the crypto world.

It will primarily be looking for startups building consumer crypto, web3 infrastructure, and decentralized finance applications.

It's also launching BessemerDAO, which is a Web3 community built on Discord that it hopes will help portfolio companies and others in the crypto community to meet talent, as well as compare notes on things like product, business development, and tokenomics.

Why a DAO? “We think it's a way we can amplify our efforts… helping not just our portfolio companies, but all companies — it'll be an open community,” Kurzweil tells Ryan.

Context: Bessemer is not new to crypto investing — Kurzweil says it has made nine investments in the space over the last several years.

Portfolio companies in the space include NYDIG, MakersPlace, Sorare, and TRM Labs, as well as some that haven't yet been announced.

Among more traditional VCs, Bessemer is not alone in wanting to show an interest in crypto — earlier in the week, Bain Capital introduced its own $560 million dedicated crypto fund.

And in February, Sequoia announced a $600 million fund focused on crypto tokens.

Yes, but: A $250 million commitment from an institutional VC seems downright quaint in a sector dominated by billion-dollar crypto-native funds.

Bessemer will be competing with the likes of Paradigm, which has a $2.5 billion fund, Andreessen Horowitz ($2.2 billion), and a16z alum Katie Haun's ($1 billion), among others.

Still, while Bessemer is earmarking $250 million for web3 startups, Kurzweil says that's the floor of the commitment, not the ceiling.

"There's nothing to stop us from investing more — particularly in late-stage companies that we could invest in from our growth fund," he says.

2. The BFD: The DAO of Bessemer

Illustration of a blockchain forming a question mark.

Goldman winds down Russia business (Bloomberg)

Goldman Sachs has become the first Wall Street bank to announce its exit from Russia following the Ukraine invasion.

Sezzle laid off a substantial portion of its staff (Protocol)

BNPL company Sezzle will lay off 20% of its North American staff, and about 40% to 50% worldwide. This comes after its merger with Australia's Zip.

Citigroup exec leaves to start fintech investment fund (WSJ)

Dan Keegan, a Citigroup markets executive, is leaving to start his own investment fund focused on fintech businesses.

3. Credit score

Illustration of a credit score meter with emoji faces showing sad, neutral, and happy emotions.

• Marlette, a Wilmington, Del.-based personal loan company, raised $225m in Series E fudning. Healthcare of Ontario Pension Plan led and was joined by Davidson Kempner Capital Management. https://www.marlettefunding.com/

• Propel, a Brooklyn-based food stamps tech company, raised $50m in Series B funding. Nyca Partners led and was joined by Andreessen Horowitz, Kleiner Perkins, and Flourish Ventures. http://axios.link/hauB

• Stilt, an SF-based provider of fintech services for immigrants, raised $14m in Series A funding led by Link Ventures. It also secured a $100m debt facility. http://axios.link/Ohxj 

• Chipper, an Austin-based app for student loan borrowers, raised $5.6m in seed funding from Freestyle Capital, Slauson & Co. and Propel Venture. http://axios.link/skUj 

• Visa (NYSE: V) completed its €1.8b purchase of Tink, a Stockholm-based open banking platform that had raised around $250m from firms like Insight Partners, Eurazeo, Dawn Capital, Heartcore, ABN AMRO Ventures, Nordea Funds and Sunstone Capital. http://axios.link/5ZRL 

4. Deals of the day

• Alex Kriete, co-head of digital assets at Citi, is leaving to launch a crypto startup. http://axios.link/M5U7 

• Unit hired Matt Sullivan as VP of finance. http://axios.link/QZhx

• Carrot Fertility hired Melissa Herman as its chief financial officer.

• Kyro Digital appointed Darshana Munde-Navagare as its CTO and head of engineering. 

5. It's personnel

A Tweet discussing a fintech developer's ability to build a ledger

6. Memes and mumbles

Happy Friday, Fintech Deals readers. We made it through another week!

Situational awareness: The NFT market is cooling off, and fast.

The average selling price of an NFT has dropped more than 48% since a November peak to around $2,500 over the past two weeks, according to NonFungible.

Tell your fintech friends, family, crypto pals, and others about this newsletter. They can sign up here.

March 11, 2022

1 big thing: Stripping down Stripe's crypto push