Circle, the issuer of USDC, the second-largest stablecoin by market capitalization, has launched an initial public offering (IPO) of 24 million shares of its Class A common stock. The company will issue 9.6 million shares, while selling stockholders will offer 14.4 million shares. Circle has applied to list its Class A common stock on the New York Stock Exchange under the ticker symbol CRCL.
The IPO involves participation from several major US and European investment banks, including JPMorgan, Citigroup, Goldman Sachs, Barclays, Deutsche Bank Securities, and Societe Generale. The company expects to offer IPO shares at a price ranging from $24 to $26 per share, potentially raising between $576 million and $624 million. Circle will not receive any proceeds from the sale of shares by selling stockholders.
Crypto-focused investors like Cathie Wood’s ARK Invest have expressed interest in purchasing up to $150 million of IPO shares. However, these indications of interest are not binding agreements or commitments to purchase. Circle targets a valuation of up to $6.71 billion on a fully diluted basis in its IPO offering.
The firm previously aimed for a preliminary valuation of $4.5 billion through a blank-check deal with the special purpose acquisition company Concord in 2021, which was later amended to place Circle at a $9 billion valuation. Circle co-founder and CEO Jeremy Allaire stated, “For Circle, becoming a publicly traded corporation on the New York Stock Exchange is a continuation of our desire to operate with the greatest transparency and accountability possible.
Founded in 2013, Circle is known for issuing USDC, which has a market cap of $61.5 billion, while its main competitor, Tether’s USDT, has a market cap of $152.7 billion.
Circle poised for NYSE listing
Tether has signaled that it does not intend to launch an IPO. Circle’s IPO approach is unusual for tech IPOs, as most of the shares being sold in the offering are coming from existing stakeholders rather than the company itself. Circle co-founders Jeremy Allaire and Sean Neville are among those selling shares, alongside other directors and venture investors.
This strategy mirrors Facebook’s 2012 IPO, where 57% of the shares were sold by private stakeholders. In Circle’s case, 60% of shares are coming from existing investors. The high level of insider sales is likely due to the prolonged period of meager returns for venture capital firms.
Silicon Valley’s tech investors are in dire need of liquidity after facing soaring inflation and increased interest rates, which pushed investors away from riskier assets. Circle CEO Jeremy Allaire is selling about 8% of his stake, while co-founder Sean Neville and finance chief Jeremy Fox-Geen plan to sell 11% each. Venture firms Accel, Breyer Capital, General Catalyst, IDG Capital, and Oak Investment Partners are all scheduled to sell about 10% of their stock.
Despite these insider sales, the significant remaining holdings of insiders demonstrate their continued confidence in the company’s future. Circle’s move to go public reflects its pursuit of heightened transparency and accountability through a listing on NYSE, positioning itself alongside traditional financial institutions while navigating the evolving landscape of the crypto industry.