The former Silicon Valley fintech star was valued at half its previous worth in an acquisition, while the stablecoin newcomer declined a high offer from a leading payment company

Author: Charlie, Venture Partner

Hello everyone, welcome to the new episode of "The Fuzzy Lion on Dune Road." In this episode, I want to analyze two major news stories from last week: both related to M&A (mergers and acquisitions), but in completely opposite directions.

The first piece of news, which surprised many, is: Brex was acquired by Capital One for $5.15 billion. The second piece is in the opposite direction: Zero Hash rejected Mastercard's $2 billion acquisition offer, choosing to remain independent and seek the next round of financing.

Strictly speaking, these two deals are not in the same lane: Brex is more aligned with traditional fintech, even approaching a banking ecosystem; Zero Hash, on the other hand, is focused on the infrastructure around stablecoins as an "orchestrator/processing layer."

However, within the larger trend, they tell the same story: stablecoins are becoming the new underlying infrastructure for fintech and banks; regulatory frameworks are forcing the industry to re-layer and re-price. These two deals happen to be examples of this "re-pricing."

Let's break it down step by step.

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 "shiny."

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

The more critical aspect 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 getting a great deal using high-priced stock; 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 price discount but also in the unfavorable structure for the seller.

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 metric is that Brex's revenue or annualized revenue for 2025 is expected to be around $500 million. If we take the $5.15 billion valuation, that translates to about 10 times revenue.

If you treat Brex as a "pure SaaS/platform company," 10 times is not particularly impressive. It is no longer comparable to the "multiple tens of 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 customers (especially tech companies and higher-quality client 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 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, a higher average transaction value for enterprise clients; second, it is easier to balance profitability.

However, in the long run, 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 with the route of growing alongside SMBs and startups. This "sticking to the main battlefield" strategy will create a very clear differentiation in subsequent reputation and growth narratives.

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.

Looking back to the early days, Ramp did not have the same advantage in PR and exposure as Brex and Mercury. However, over the past year, I have seen Ramp take very aggressive product actions. Listening to its founder on podcasts and interviews, you can sense a concentration of focus on "product"—thinking clearly, executing, rapidly iterating, and continuously pushing the experience and efficiency upward.

In contrast, when I look back at Brex, I have participated in some online events and interviews with their founders and have a vague sense that their focus is 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 the Rails

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

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

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 changed to stablecoin rails, its logic for customer acquisition and expansion globally is no longer completely 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 revenue around $1 billion, translating to about 30 times; while Brex was acquired at about 10 times revenue, the gap is almost like two different worlds.

But this 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 stablecoin orchestrator middleware/infrastructure. The common outcomes in the market have been that orchestrators either get acquired by giants (like Bridge by Stripe) or are re-evaluated for "strategic value" during 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, giving it a sense of "real leverage" rather than just "emotion-driven" decisions.

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 PMF in the Global South (developing countries), driven significantly by U.S. tech companies globalizing their hiring post-pandemic: many positions exist as contractors rather than local formal employees.

Contractors face fewer compliance constraints in many countries, and payment methods are more flexible, providing significant growth opportunities for stablecoins. 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 not just "a new payment method," but that stablecoins have truly entered a high-frequency, essential mass market scenario: payroll.

For Zero Hash, being tied to a platform like Gusto represents both quantitative growth and qualitative change: stablecoins expand from "exchange settlements and speculative scenarios" to "scenarios closely related to ordinary people's income and company operations."

A more direct comparison is:

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

Remote's partnership with Stripe/Bridge disclosed coverage of about 69 countries for contractor 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), from the perspective 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, market rumors began to circulate about Zero Hash "terminating acquisition talks and choosing independence." The company did not publicly state that it rejected the acquisition because of Gusto, but the timing certainly makes this inference more credible.

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

In addition to Gusto, Zero Hash has two other significant partnership leads 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 extends 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 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 bolder: 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 has been pushed into a larger, more mainstream money flow system. For an orchestrator, this type 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

It's also important to 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 local formal employee salaries, many countries still do not allow payments in stablecoins or cryptocurrencies. In the overall payroll market, stablecoins may only capture a relatively limited proportion in the short term.

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

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

At this point, the regulatory context must be included to connect the two deals in 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, a version proposed by the Senate Agriculture Committee has emerged, but from market feedback, its potential for passage seems smaller, with more focus still on how to advance the mainline bill and reach consensus among 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 mergers and acquisitions at this time. If regulation tightens the screws on stablecoin revenues, it will benefit banks in maintaining their funding moat. Banks will be more willing to invest acquisition capital into "enterprise entry points," rather than gamble on other new plays. Acquiring Brex as a funding entry point, akin to "acquiring another bank," is a very cost-effective transaction from the buyer's perspective.

Second, why infrastructure like Zero Hash is more likely to be viewed by mainstream finance as "a middleware for accessing on-chain finance" when regulation becomes clearer and emphasizes 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 favorable premise for independent growth.

9. Conclusion: The Same Event, Different Perspectives Yield Different Evaluations

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

I have seen many VCs comment on Brex's acquisition, leaning more towards support and understanding. Many VCs have accompanied Brex and Zero Hash through high valuations and lows, and achieving a decent exit at a scale of billions, 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 route, possibly leading to an IPO, will evoke mixed feelings among 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 founders, their visions during the pre-seed and seed stages were very ambitious. But the reality is that industry regulation and policy do not always align with your interests. Being able to secure a relatively good valuation and a reasonable acquisition proposal with a mix of cash and stock during a certain window is something I genuinely feel happy for the founders about.

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 scaling Taipei 101 with bare hands, while on the other side, the audience inside the building is taking selfies, captioned "Founder vs VC." It is certainly exaggerated, but the sentiment is very real.

So whether it's Brex's acquisition or Zero Hash's rejection of the acquisition and choice for independence, 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 mergers and acquisitions in fintech and stablecoin infrastructure. If there are any new key events, I will continue to update and analyze them for everyone.

See you next time.