Circle Prepares for IPO as Valuation Drops to $5-5.25 Billion
Circle Internet Financial, the issuer of the USDC stablecoin, is preparing for its initial public offering (IPO). Private shares of Circle are currently trading on the secondary market at a price that implies a valuation of $5-5.25 billion. Interestingly, this valuation is significantly lower than the $9 billion reached in 2022 during its initial attempt to go public through a SPAC merger.
Details of Secondary Transactions
Circle’s shares are being traded on the secondary market prior to the planned IPO, but only on a case-by-case basis and in specific situations. Sellers are mainly early investors seeking liquidity or Circle employees. The employees often have the opportunity to monetize their stock options before the company goes public. Circle does not allow transactions below a valuation of $5 billion.
Evolution of Circle’s Valuation
In 2022, Circle reached a valuation of approximately $9 billion during its attempt to go public through a merger with Concord Acquisition Corp, a SPAC. However, this merger was canceled in December 2022 after the U.S. Securities and Exchange Commission failed to approve the agreement in time, along with the collapse of FTX and the bear market.
Performance of USDC and IPO Plans
In a January report titled ‘State of the USDC Economy,’ Circle stated that the number of USDC wallets holding at least $10 had increased by 59% over the previous year, reaching about 2.7 million. The number of transactions in 2023 had reached 595 million by the end of November. Circle filed a confidential S-1 document with the SEC in January of this year to sell shares to the public for the first time. The number of shares to be offered and the price range for the planned offering have not been determined. The exact timing of the IPO is still unknown. Circle plans to make the United States its new legal domicile before the planned IPO. The company has filed documents to move from its current home in Ireland.
