Inside stablecoin firm BVNK’s journey to a $1.8B acquisition by Mastercard

Long before big-ticket crypto deals and billion-dollar acquisitions make headlines, there’s a long and hard-fought journey, often culminating in a secretive contest where jockeying suitors bid, bluff or walk, until eventually the best match makes it down the aisle. Mastercard’s recent $1.8 billion acquisition of stablecoin infrastructure firm BVNK was no exception.

It’s a process that takes place out of view, under iron-clad non-disclosure agreements, but venture capital firm Concentric — an early investor in BVNK — gave CoinDesk a rare peek behind the curtain, beginning with the startup’s rise and ending with the completion of the deal earlier this week.

The venture capital business is a numbers game. In the case of BVNK, Concentric’s bet paid off: the VC firm backed the stablecoin startup in 2019 at a valuation of just $4 million. Founding partner of Concentric, Kjartan Rist, recalled being introduced to BVNK in 2018.

“They came to us highly recommended by an alumni CEO that we had already backed,” Rist told CoinDesk in an interview. “So, there was a lot of trust there, and this CEO said, ‘You got to meet these guys’. They were serial entrepreneurs coming out of South Africa. They’d never built businesses outside of South Africa, but they were hungry. They were relentless.”

Despite enjoying a sturdy exit, Rist said he feels mixed emotions toward the Mastercard acquisition, having been part of the whole BVNK journey. “It’s actually sad to sign the papers, almost like sending your son off to boarding school,” he said.

Chris Harmse, co-founder and chief business officer at BVNK echoed this: “It’s been an incredible journey,” he said in an email. “Concentric has been a valued partner throughout that journey.”

Stablecoins, one of the busiest areas of crypto, have become a focal point for the large card networks and payments players. The total stablecoin market cap is about $300 billion, according to CoinGecko data.

The proverbial cat was set loose among the pigeons when Stripe acquired stablecoin infrastructure firm Bridge in late 2024 for $1.1 billion. This probably put pressure on the likes of Visa and Mastercard to start kicking the tires of other stablecoin shops so as not to be outflanked by Stripe’s aggressive approach.

Mastercard has the deepest respect for Stripe, Rist of Concentric said. “I think that’s another way of saying that they’re looking over their shoulder. So they are aware of the competitive threat that is coming from Stripe because of the way they execute, the simplicity in their offering and the lack of legacy they have,” he said.

During the cut and thrust of the deal formation, U.S.-listed crypto exchange Coinbase was reported to have had the upper hand at one point, potentially offering as much as $2.5 billion for BVNK. But something changed, which was to do with chemistry, according to Rist.

“The founders, when choosing a partner or choosing someone to buy them, emphasize a lot on the culture and the chemistry,” Rist said. “And the chemistry with Coinbase — although they probably put a bigger number on the table — it didn’t work.”

This came down to the fact that Coinbase is an exchange, while Mastercard is a financial services company, Rist added.

“Mastercard was part of the first discussions and BVNK were quite clear when they got into discussions with Mastercard that there was a meeting of minds,” Rist said. “But they decided to try it out with Coinbase. Mastercard stood outside on the porch waiting for them when that didn’t work out. So it’s been a painless process, to be honest.”

But it wasn’t just Coinbase who muscled in, Rist said. Visa also took a shine to BVNK.

“All the usual suspects were involved, and Visa had an advantage because they were an investor. They made some money out of BVNK…and they actually had an observer position on the board,” Rist said.

In the end, however, Rist said Visa decided not to pursue a potential acquisition. “I think they are adopting a slightly different strategy when it comes to to stablecoins. Rather than owning an operator, they will partner with multiple operators and partner also with Stripe, etcetera,” he said.

CoinDesk recently broke the news that all four firms — Stripe, Visa, Mastercard and Coinbase — were involved in backing a new stablecoin platform, which has since gone live. This only underlines the fact that stablecoins continue to be an area of importance for TradFi institutions despite an ongoing bear market in the crypto industry more broadly.

Looking at specific use cases keeping BVNK busy, Rist pointed to various treasury functions that are streamlined by the use of stablecoins.

“One large payments company working with BVNK rolls its treasury every 24 hours, and now they’re using stablecoins to roll it,” he said.

Another benefit comes from the way BVNK and others are servicing companies that have a huge distributed workforce with a number of these workers or freelancers in countries that have very high levels of inflation.

“These firms are using dollar-nominated stablecoins so workers can choose to keep them in their wallets and don’t have to receive pesos or naira, for example,” Rist said.

After backing a winner in the form of BVNK, Concentric is looking for its next stablecoin company to invest in.

“There are hundreds of companies out there now claiming to be the next [big] stablecoin company. In my opinion, only about 10% of these guys are full stack, institutionally verified, and can actually become a winner of some sort,” Rist said. “The other 90% of them are just a front end and some APIs, so it’s our job to figure out who the real guys are.”