Privy acquired by Stripe as stablecoin demand pulls major fintechs into crypto

Very kind. Appreciate it. Talk to you soon. Talk soon. Bye. Bye. Cheers. Uh, we have our next guest already in the studio. Really quickly, let me tell you about public. com. Investing for those who take it seriously. They got multiasset investing, industryleading yields, and they're trusted by millions, folks.

Uh, let's invite Henry into the studio from Privy. We're talking about the Stripe. Congratulations. What's going on? Welcome to the show. How you doing? I'm good. How are you? How How are your inboxes doing the last 24 hours? A lot of lot of wealth managers. Hey, congratulations. Blowing you up. Congratulations.

We haven't talked in a while. I'd love to catch up. Yeah, congratulations. Um, we would have wanted to have you on yesterday, but but we of course we're at demo day, but um but yeah, how how are you doing? I'm good. You can see I'm dressing for the job I want. So, this is my audition. Thanks. I appreciate it. Thank you.

Now, uh terms of the deal were undisclosed. We're not going to talk terms. Is that correct? That is correct. Okay. But I'm still We're going to still hit the gong for you. That's what That's what matters. Even if the numbers are disclosed, we're still gone. Congratulations.

Uh but yeah, I mean take us through obviously we're not going to go through the deal, but I want to know more about the company and the future of uh of of of really just like the fintech stack as we move from fiaton companies to fiat plus crypto and the interaction between these two.

So maybe you could kick us off with a little bit of background on the company, what you built and then how that's going to integrate. Yeah, for sure. So I mean to be very fair and I'll put the disclosure up front. We're still in the closing period.

You know we we put all the asterises on the on our blog post and so on and so for the time being uh we're still very much two separate companies and and on that front I I I can't share all that much about you know any joint things but I can tell you about what we're seeing in the space and what we think is going to happen moving forward.

Yeah. Why don't you give a quick history of the company too because uh you're you're a couple years old. Is that correct? Is Yeah. We started about three three years ago. A little over three years ago. Wow. Got it. Got it.

and uh you immediately ran into the the one of the most meaningful crypto winners that you know maybe maybe it's not as bad as as some of the earlier ones but it felt significant at the time. So yeah, quick history would be great and then and then we kind of get into the present.

Yeah, I think you know harsh winners temper uh hard companies. So we we have been uh fighting for our lives for for a while which I think uh affects a lot of of our intensity. But uh the TLDDR um I worked in crypto for a while.

So I guess starting with me was an applied cryptographer and ended up doing distributed systems research at a fairly low level and came out of it very excited about this sort of complimentary rail to the web. The web is very good at fairing information across the world.

But uh the ability to move value, the ability to move assets and data uh without centralized intermediaries is super hard. And so uh that was very exciting. Flip side uh all of the products that I was seeing being built in crypto were broadly terrible. And uh I would not use any of them.

And I think it had a super negative sort of cyclical effect where broadly you had two constituencies in crypto. You had academics and you had scam artists. And uh those were the two things that you could you could really cool research or you could try and fleece retail uh very quickly.

And and the thought that we had with with my co-founder Asta is if we can make it easier for anyone to build compelling products on these rails, we can kind of widen the aperture for what you can build with crypto.

And so we set out to build things around the sort of core crux of what ownership in crypto means, which is to say the wallet. Historically, uh a wallet's a Chrome extension or, you know, a browser extension of any sort uh or a hardware device.

you plug it in and every time you want to take an action that is going to sort of send out a transaction to the blockchain. So affect the state of uh you know the the chain as it were.

So usually this is financial or this could be uh data related asset related um when you want to buy an NFT when you want to send money um you have to make such a transaction every time you want to do that you basically get taken out of the app you have a popup that's in your face it interrupts the app flow and it basically um is akin I think to like filling out all your credit card details when you get to an e-commerce site before you've filled in your cart before you've decided that you even want to engage with this.

So I think our thought was can we create a different kind of wallet that embeds directly into the product and that gives the developer building with crypto more power over their craft so they can build a really compelling experience and have the ability to communicate with the underlying rails be built in.

Uh and so you know that's what we do. We build onboarding and embedded wallet systems. We make it easy for any developer any business to leverage crypto as part of their apps. We work with everything from uh neo banks who want to offer digital dollars to anyone across the world to payroll providers.

We have a customer toku for example that makes it very easy to pay anyone with stable coins. So let's say privy has a Nigerian contractor. If that Nigerian contractor wants to get paid in USDC rather than in Naira uh USDC's held its value against uh dollar obviously much better than Naira over the past few years.

um that contractor can receive the USDC, can hold the digital dollars um without having to have a US bank account just through privy basically creating a wallet that is backed by their email. So we make it very easy for anyone to basically hold, earn, send uh digital assets in app.

And so this is uh I was saying neo banks, payment providers all the way to trading platforms. We serve folks like Hyperlid. Hyperlid is a trading platform that's done about a trillion dollars in volume over the past 18 months. they do about 10 to 15 billion a day in trading volume.

Um Jupiter is another example and all these are platforms that are driving basically massive flows but who want to give their users uh an ability to have very sort of low-level secure powerful uh wallets that can be built into the product and we think this is going to become a much wider uh range of of the way people build when they want to build uh any product that touches value on the web.

Talk to me about the actual onboarding experience for uh the average user. There's a lot of uh where we seem to be in a transition period where uh more and more people are interacting with crypto rails and not even really knowing that that's what they're doing.

It doesn't feel like oh command line bitcoin transactions anymore. It feels much more like the web. And so uh what is the what is the funnel that the average customer goes through? When are they seeing your product and how are they interacting with it at various points in the customer journey? Yeah.

I mean so broadly you know you can think of us as a key orchestration provider. We do key management under the hood. A lot of our work is the security of basically these uh the these rails and this key management and a lot of it is around latency.

making sure that these wallets are so fast that as a user even though you're taking actions that require these transactions you don't notice it. So our average signing time is call it somewhere between 20 and 100 milliseconds. Uh because you know starting at 250 300 you start to notice it.

So that's a lot of what we focus on. The question of how do you integrate that within your product is really up to our customers.

I think our core contention is uh products are not one sizefits-all and to that end the way in which you want to interact with these wallets is very different depending on where you are in your life cycle.

So you know you wouldn't interact with uh Candy Crush the way you would interact with your JP Morgan application likewise the wallet that we have for NeoANK that has Face ID.

So you log in for example with an email or a pass key um from there while it's created under the hood you might not see it and every time you want to send money you might just need to face ID again to approve the transaction is going to be different from the interaction for example for uh somebody who's doing digital asset management as part of their company where they want multiple signers and they want to look at transaction details looks a lot more to what people are used to in crypto or you know last example we serve games uh and these games obviously just don't want any pop-ups whatsoever.

So the onboarding journey is as simple as login with an email. You don't need to record a pneummonic. You can always export your key if you want to. So you can sort of pop back out and get into the power user mode that traditional wallets give you.

But otherwise, whether your user is a layman or an expert, uh they can interact with these rails just the same. Talk about the momentum that you guys have seen this year in particular. It's been a wild year for for the industry broadly. It's been great in a lot of ways.

Um and uh some of the companies you mentioned, Hyperliquid, Jupiter, things like that, you know, got uh have been around for a while. What what kind of new momentum are you seeing across, you know, privy signups and and potentially categories that that uh that maybe wouldn't have been possible uh a few years ago? Yeah.

I mean, if you look at companies I I'll I'll question the premise for a second.

just if we get a graph going of like you know uh relative time to growth to volume I'm pretty sure hyperlid ranks pretty high up there in terms of companies that have gotten a trillion dollars moved in call it as a 2-year-old company likewise if you look at pump or jupiter other customers of ours uh these are folks who are doing incredibly fast work in that regard but but to actually answer your question one obviously stable coins and the I would say broad foundational interest they're getting across incumbents.

It used to be I think like the crypto cope when AI was uh I mean it still is but like you know late 2022 crypto implodes. AI is absolutely taking off. Everybody is looking at their seat and being like oh man I made some terrible choices in my life.

And uh the cope I think was well crypto is the only part of tech that can enable new players to arise whereas AI benefits the incumbents because you need a data mode. And I kind of think that stable coins changes that dynamic. For the first time, there's a real advantage to adopting crypto for existing incumbents.

They have better capital efficiency for their treasuries. They need to hold less fiat in various countries. And so we're seeing that we're talking to, you know, you know, I've done this uh look in chat JBT. What are the top uh 10 fints in the world?

And we're talking to call it seven or eight of them at this point who are looking at these things. And so it's a question of we want to offer our customers the ability to buy and hold assets. We want to offer uh the ability for folks to send assets cheaply and instantaneously across the world.

And broadly, we want to expand our operations globally. So, it's companies like Airbnb, it's companies like Uber, it's all of these folks who are looking in that weren't before. I would say that's broadly the big change over the last 6 months. But then like the other side of this is trading.

Uh you see rotations and where capital forms in crypto, but there is just so much trading interest.

And the the thing I promise I'll shut up in a second, but the thing that uh that that we find really cool and interesting about the way we build is that by kind of serving the two extremes of the market, we think we we build a much better product.

Uh a weird example, but uh we have a very powerful sort of low-level policy engine. You can say uh this wallet can trade up to $1,000 a day, but if these two people sign off on it, it can do a million dollars. And these policies uh we built because we had uh these apps that were trying to do agentic trading.

They were trying to get AI agents to place trades on behalf of users. And they were like, "Oh, [ __ ] If the LLM hallucinates, this is going to be very, very bad. We need to limit on how much we let the LLM uh do. " And now that we're working with neo banks, these neo banks are saying, "We have risk policies.

We have, you know, ways in which we want to approve uh activity. Can you give us a policy engine? " And so this policy engine that was developed for one side of the market is very useful for the other. And we're kind of seeing that across the board. All of our customers are sort of pulling us upward.

in a way we're serving this really wide range actually I think creates a future proof product. Um I know the the the transaction is is um still uh in the you know uh process of closing but can you talk at a high level about what drew you to wanting to work with uh the Stripe team? Yeah.

Um I was in a telegram chat yesterday and somebody said uh I was just like creeping and somebody said uh there the you know there must have been that stripe charm or that Collison charm and I think it it plays I you know this is a company the luck of the Irish luck of the Irish strikes again we we we we've we weren't intending to sell and I think the reality this is something an investor has said which is this is the most exciting time this industry has had in a long time.

you've literally chewed through the worst environment uh for a startup over the past however many years. Why now? And I think the reality is because we are seeing things move very quickly.

We want to accelerate that change and we were uh very drawn to I think that the care for craft and the huge lever that basically uh this partnership we think can bring to bear on the space.

Uh so that that was a lot of what was exciting to us is is broadly I think we share a lot of uh uh values for how to build great developer tooling and then I think the ability for us to accelerate our timelines and to accelerate the space more broadly in our own little way uh by just working that much harder with more resources for the teams that we serve was was the really exciting part.

Very cool. Well, congratulations and uh good luck with the rest of the process. For you and the team and for Stripe and for what you guys can accomplish together and we'd love to have you back when when you know you can talk more about the future and and building.

I'm I'm really excited for this and I think it's something that everyone's thinking about is like what's the future of fintech as fiat and crypto mingle more together. Yeah. Uh it'll be fantastic. Incredibly bullish. Anyway, thank you so much for hopping on. We'll talk. Congratulations. Good luck closing. Cheers.

We have our next guest in the studio already. But first, I want to ask you, how did you sleep last night cuz I think I got you beat. I think I got you beat. I think it's a clean sweep this week. I got a 91. 7 hours 39 minutes. 93% consistency. 90 tie. This is the first time we've ever tied. Go to eight. com.

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