The former Silicon Valley fintech star was valued at half its previous worth during acquisition, while the stablecoin newcomer declined the high offer from the payment leader

Core Viewpoint

1. Capital One Acquires Brex: A Big Deal, but Not Friendly to the Seller

At first glance, $5.15 billion is certainly a big deal. But if you place Brex back in the context of the fintech boom during the pandemic, you'll find that this price is not as "glamorous."

Brex was valued at over $12 billion during its peak in 2021-2022. Now, with a deal at $5.15 billion, it represents a significant discount compared to its peak, essentially understood as "more than a halving."

More critically is the deal structure. Public information shows that this acquisition is half cash, half stock: approximately $2.75 billion in cash + about 10.6 million shares of Capital One stock. Coincidentally, Capital One's stock price was at a historical high around January this year. In other words: the buyer is using high-priced stock as consideration, which is very advantageous; the seller receiving half in stock naturally bears more volatility.

So from the perspective of the term sheet, the "ugliness" of this deal lies not only in the discounted price but also in the structure that doesn't favor the seller. For the seller, it is indeed a rather unfriendly combination of terms.

2. Brex's Valuation Multiple: Why the Market Didn't Price It as a "Platform SaaS"

Next, let's discuss the second question: What does the $5.15 billion actually mean in terms of multiples?

Brex's revenue structure is very complex: it includes interchange fees from card transactions, interest income from cash management, software subscription fees, and foreign exchange, among others.

As a private company, it does not disclose information as clearly as public companies, so the media and market often mix net revenue, gross revenue, and run-rate (annualized revenue) together.

A common public estimate is that Brex's revenue or annualized revenue in 2025 is around $500 million. If we take the $5.15 billion valuation, that would imply about 10 times revenue.

If you treat Brex as a "pure SaaS/platform company," 10 times is not particularly good. It is no longer comparable to the "multiple times ARR" valuation logic from the last financing round.

This indicates a very realistic judgment: Capital One did not value Brex as a SaaS platform, but rather more like a traditional enterprise financial entry point. What banks value is: it can bring in new enterprise clients (especially tech companies and higher-quality customer groups), as well as the underlying capital deposits, compliance constraints, and cross-selling opportunities. This is a very "bank-like" valuation logic.

3. Shifting from SMB to Enterprise: How Brex's Strategic Choice Reflects Today's Discount

Here, I want to look at Brex's acquisition alongside a key decision it made in 2022.

Many people may remember that in 2022, Brex made a decisive strategic shift—moving from serving traditional SMBs and startups to focusing more on enterprise clients. This decision may bring two immediate benefits: first, higher average revenue per enterprise customer, and second, easier balance of profitability.

However, in the long term, it may also bring another side: the breadth and growth potential of SMBs are weakened, and the brand perception becomes less "universally usable," resembling more of a "financial tool for specific circles." When you place this back into today's acquisition pricing, you'll find that: when user growth and ecosystem expansion are no longer continuously validated by the market, valuations are more likely to revert to traditional financial multiples.

Meanwhile, let's look at Brex's competitors: Mercury and Ramp have instead chosen to stick to the path of growing together with SMBs and startups. This strategy of "sticking to the main battlefield" will create a very clear differentiation in subsequent narratives of reputation and growth.

4. Founder's Mindset and Product Rhythm: The Reputation Gap Between Brex and Ramp

Speaking of Ramp, I must mention a more "non-financial" variable: the founder's product mindset and execution rhythm.

In the early days, Ramp did not have the PR and exposure advantages that Brex and Mercury had. However, in the past year, I have seen Ramp take very aggressive product actions. Listening to its founder on podcasts and interviews, you can feel the concentration of "all about the product"—thinking clearly, executing, rapidly iterating, and continuously pushing the experience and efficiency upward.

In contrast, looking back at Brex, I have participated in some online events and interviews with their founders and have sensed that their focus seems more on "grand narratives," "personal branding," and "industry discourse power," rather than the day-to-day product details.

In the industry, when discussing reputation, Brex has indeed gradually distanced itself from Ramp over the past two years.

Such gaps will be magnified when the valuation environment cools: capital will no longer pay for "stories," but will only pay for continuously verifiable products and growth.

5. Ramp's "Out-of-the-Box Move": Fully Embracing Stablecoins and Changing Rails

One of Ramp's most "out-of-the-box" moves in the past year has been its attitude toward stablecoins: not just testing the waters, but fully embracing stablecoins as the underlying rails.

After Stripe completed its acquisition of Bridge in May last year, Stripe launched stablecoin-backed cards, global accounts, and other capabilities. Among the first batch of heavyweight partners announced by Stripe was Ramp.

For Ramp, this means that its global enterprise clients on the platform—such as merchants doing cross-border business in Africa or e-commerce on Amazon—can use the underlying capabilities of stablecoins to open global accounts, issue global corporate cards, and conduct cross-border settlements. This brings two types of changes:

First is the cost structure: the costs of global accounts settlement and fund processing may be lower and more controllable.

Second is the growth structure: when the underlying infrastructure is replaced with stablecoin rails, its logic for acquiring customers and expanding globally is no longer entirely constrained by the friction and boundaries of traditional financial infrastructure.

This is also why the market is more willing to understand Ramp as a "platform," rather than "a fintech tool more like a bank entry point." When you look at the numbers together, the contrast is striking: Ramp's reported valuation once reached $32 billion, with revenues around $1 billion, implying about 30 times; while Brex was acquired at about 10 times revenue, the gap is almost like two different worlds.

But this also raises a key question: Ramp's ability to treat stablecoins as underlying rails heavily relies on the capabilities of the stablecoin "orchestrator" layer. This naturally leads us to our second main character: Zero Hash.

6. Zero Hash: The Confidence to Reject Acquisition Comes from "Distribution Entry" and "Institutional Endorsement"

Zero Hash's positioning is very similar to Bridge and BVNK: it is a middleware/infrastructure for stablecoin orchestrators. The common outcomes in the past have been: orchestrators either get acquired by giants (like Bridge being acquired by Stripe) or are "strategically revalued" in acquisition negotiations (like the recently rumored but failed Zero Hash - Mastercard, BVNK - Coinbase acquisitions).

Zero Hash's dynamics are more interesting: after media reports of its "rejection of acquisition," it announced several heavyweight partnerships, making its confidence seem more like "real leverage," rather than purely "emotion-driven."

1) Gusto: Stablecoins Entering the Mass Market Payroll Scene

The key turning point is its partnership with Gusto. Gusto is one of the leading platforms in the U.S. payroll space. Stablecoins have found early product-market fit in the Global South (developing countries), with one significant driver being the globalization of hiring by U.S. tech companies post-pandemic: a large number of positions exist as contractors rather than local formal employees.

Contractors face relatively fewer compliance constraints in many countries, and payment methods are more flexible, providing stablecoins with significant growth potential. For contractors, "receiving payments in stablecoins" often means faster transactions and less friction.

In this context, if a payroll platform like Gusto makes stablecoin payouts an option, it signifies more than just "a new payment method"; it truly brings stablecoins into a high-frequency, essential mass market scenario: payroll.

For Zero Hash, being tied to a platform like Gusto means not only quantitative growth but also qualitative change: stablecoins expand from "exchange settlement and speculative scenarios" to "scenarios closely related to ordinary people's income and company operations."

A more direct comparison is:

Deel and BVNK's partnership disclosed stablecoin payouts for about 10,000 contractors, covering 100+ countries;

Remote and Stripe/Bridge's partnership disclosed coverage for about 69 countries for contractors' USDC payouts;

Gusto's public data shows over 400,000 small business employers, covering 120+ countries.

Even though these three have different focuses (Gusto is more payroll-focused; Deel/Remote also provide EOR and other operational services), in terms of "coverage and distribution density," Gusto's platform attributes are indeed closer to the mass market.

It's no wonder that, around the time of the Gusto partnership announcement, rumors began to circulate that Zero Hash "terminated acquisition talks and chose independence." The company did not publicly state "we rejected the acquisition because of Gusto," but the timeline alignment at least makes this inference more credible.

2) Morgan Stanley (E*Trade) and Interactive Brokers: Cementing the "Compliance Middleware" Label

In addition to Gusto, Zero Hash has two other significant partnership clues that cloak it in the guise of a "compliance middleware" that traditional financial systems can trust.

The first is Morgan Stanley: through Zero Hash's infrastructure, crypto trading will be launched on Morgan Stanley's E*Trade, targeting the first half of this year, with initial assets including BTC, ETH, SOL. This expands Zero Hash's endorsement from crypto-native to traditional financial giants.

The second is Interactive Brokers: users can deposit USDC 24/7 into brokerage accounts through Zero Hash, with the wallet and conversion links provided by Zero Hash, and it is expected to expand to Ripple's RLUSD, PayPal's PYUSD, etc. This line is even more aggressive: stablecoins are no longer just "payment tools," but have become the funding entry point for financial accounts.

Putting together the three lines of E*Trade, Interactive Brokers, and Gusto, you will find that Zero Hash is being pushed into a larger, more mainstream money flow system. For an orchestrator, this kind of distribution and endorsement is itself a source of "independence premium."

7. The Ceiling of Payroll and Its True Value: It's Not Infinite, But Strong Enough

Here, we must clarify the limits of payroll: currently, the payroll that stablecoins can penetrate is mostly still in the cross-border contractor space. When it comes to salaries for local formal employees, many countries still do not allow payments in stablecoins or cryptocurrencies. It is likely that in the overall payroll market, the proportion that stablecoins can capture in the short term is relatively limited.

However, the value of payroll does not lie in being "infinitely large," but rather in being "strong enough": high frequency, essential, and with very high migration costs. Once stablecoin rails enter payroll, it will no longer be just "a new payment method," but will solidify into operational infrastructure. Occupying this space means securing a long-term, stable, and sustainable cash flow entry point.

8. Finally, Placing Both Deals Back in the Regulatory Context: The Pull of the CLARITY Act is the Underlying Logic of "Banks Dare to Buy, Infrastructure Dares to be Independent"

At this point, the regulatory context must be included to connect the two deals into a causal chain.

One of the biggest points of contention between traditional finance and crypto right now is the CLARITY Act, which is currently on hold and under negotiation. Recently, there has been a version proposed by the Senate Agriculture Committee, but from market feedback, its chances of passing seem smaller, and more energy will still be focused on how to advance the mainline bill and how to reach consensus between Coinbase and other stakeholders.

My intuition is that banks will not completely relinquish their interests.

This also explains two things:

First, why Capital One, as a bank, dares to pursue acquisitions and expansions at this time. If regulations tightly control the profits from stablecoins, it will benefit banks in maintaining their funding moat. Banks are more willing to invest acquisition capital into "enterprise entry points" rather than gamble on other new plays. Brex being treated as a funding entry point, bought under a logic close to "acquiring another bank," is a very advantageous deal from the buyer's perspective.

Second, why infrastructures like Zero Hash are more likely to be seen as "middleware for accessing on-chain finance" as regulations become clearer and emphasize compliance and control. Non-speculative scenarios like payroll also reduce the suspicion of "regulatory arbitrage," making it easier for them to expand within the mainstream system. For Zero Hash, this is a more favorable premise for independent growth.

9. Conclusion: The Same Event, Different Perspectives Lead to Different Evaluations

Finally, I want to add a "non-cold" perspective.

I have seen many VCs comment on Brex's acquisition, which tends to be more supportive and understanding. Many VCs have accompanied Brex and Zero Hash through high valuations and lows, and being able to complete a decent exit at a scale of several billion dollars, with the acquirer being a reputable company like Capital One, is also a "glorious" outcome for the founders.

On the other hand, Zero Hash's choice to remain independent and pursue a longer, more challenging path, possibly leading to an IPO, will evoke mixed feelings for VCs: the same event can be evaluated differently due to differing interests and values.

I also have a strong sense of empathy. A company I have been advising is currently going through an acquisition process. A few years ago, when I met the entrepreneurs, their visions during the pre-seed and seed stages were very ambitious. But the reality is that industry regulations and policies do not always stand by your side. Being able to secure a relatively good valuation and a reasonable acquisition proposal in terms of cash and stock during a certain window is something I genuinely feel happy for the founders.

Business is business, and life is life. The ones truly bearing the daily ups and downs, pressures, and uncertainties are the founders themselves. Recently, there was a popular meme: on one side, a founder is struggling to climb like Alex at Taipei 101, while on the other side, the audience inside the building is taking selfies, captioned "Founder vs VC." It is certainly exaggerated, but that emotion is very real.

So whether it is Brex's acquisition or Zero Hash's rejection of the acquisition and choice to remain independent, I prefer to understand it as: that is the best answer they could come up with under the current conditions.

Epilogue

That's all for today. We will continue to monitor the progress of the CLARITY Act and how it affects the next round of M&A and independent paths for fintech and stablecoin infrastructure. If there are any new key events, I will continue to update and analyze with everyone.

See you next time.

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