Stablecoin firm Circle plans to go public through SPAC merger at $4.5 billion valuation

• Cryptocurrency firm Circle announced that it will merge with blank cheque company Concord Acquisition Group to be listed on the New York Stock Exchange.
• A new external company is to acquire both the stablecoin firm and the SPAC for the listing.
• Circle’s capital would reach roughly $1.1 billion through funding rounds and the IPO.

Stablecoin firm Circle will go public through a merger with Concord Acquisition Corp, with a valuation of over $4 billion.

Another crypto firm goes public 

Circle, the principal operator of one of the world’s most popular stablecoins, USDC, has revealed that it has plans to become a public company. Through its merger with Concord Acquisition Corp, a SPAC, the deal would value the fintech firm at $4.5 billion.

$9 billion in USDC has been minted by a consortium founded by Circle as of early 2021. The stablecoin sector has grown rapidly, with the USD Coin’s circulating supply reaching nearly $26 billion. The fintech firm believes that there will be $190 billion USDC in circulation by the year 2023. Circle CEO predicted earlier this year that the firm may surpass PayPal in transacted dollar value. 

As part of Wall Street’s popular trends, a tech company can merge with a publicly-traded blank-check company, also known as a SPAC. According to Renaissance Capital, around 200 SPACs went public last year, and raised roughly $64 billion in total funding, nearing all of 2020’s initial public offerings combined. 

Under the agreement, an external holding company will acquire Circle and Concord. The new firm would become a publicly traded entity that would be listed on the New York Stock Exchange under the ticker “CRCL.” 

The stablecoin firm’s deal with Concord is expected to close in the last quarter of 2021. 

Investors, including Marshall Wace, Fidelity, Adage Capital and Third Point have committed capital of an additional $415 million as PIPE financing. Private investment in public equity, also known as PIPE involves the selling of shares of a public firm in a private arrangement among selected investors. 

In June, Circle raised $440 million, which marks one of the largest funding rounds in crypto industry history. 

After the company is successfully listed, Circle shareholders will receive 86% ownership of the public entity. 

Circle was founded in October 2013 by Jeremy Allaire, who will continue to act as CEO of the company, while Concord Chairman Bob Diamond will join the board. The firm has received funding of over $135 million from four rounds of investments from 2013 to 2016 in venture capital, with notable investors including Goldman Sachs.

Combining the firm’s investment commitments, the IPO proceeds and the funds raised in the May fundraising round, Circle will have roughly $1.1 billion in capital. The deal’s proceeds will be used for growth and product development. 

The fintech company is one of the latest firms in the digital currency industry to dive into the public markets this year, after tremendous growth of Bitcoin price. The leading cryptocurrency doubled in 2021, as new investors poured capital into the digital asset markets. In April, popular crypto exchange Coinbase went public on the Nasdaq through a direct listing. 

Although the exchange’s direct listing was a watershed moment for cryptocurrencies and witnessed a surge of interest from retail investors and speculators, traction quickly subsided as the stock closed 14% below its opening price on its debut. 

---