Privately held shares of stablecoin company Circle Internet Financial, the issuer of USDC, are currently trading on the secondary market at a price that suggests a valuation between $5 billion and $5.25 billion ahead of its planned initial public offering (IPO), according to people familiar with the matter.
Circle allows limited trading of its shares on the secondary market. According to two sources, this trade is allowed on a case-by-case basis and only in certain circumstances. Early-stage investors seeking liquidity and Circle employees are the primary sellers, one source said. As confirmed by two sources, the company does not allow transactions below $5 billion valuation.
The Coinbase-backed company was previously acquired by Concord Acquisition Corp. in 2022. It reached a valuation of approximately $9 billion when it tried to go public through a deal with a special purpose acquisition company (SPAC) called. However, the proposed merger was mutually terminated in December 2022 after the U.S. Securities and Exchange Commission (SEC) failed to give timely approval, combined with the collapse of Sam Bankman-Fried's FTX and the ensuing crypto winter.
One source suggested investors should not be overly concerned about the difference between the 2022 valuation and the current secondary market valuation. The secondary market is currently under pressure and many investors need to raise cash so are willing to sell at any price.
In a report titled “The State of the USDC Economy” published in January, Circle reported a 59% increase in the number of USDC wallets holding at least $10 compared to the previous year, reaching nearly 2.7 million in total. By the end of November, the number of transactions in 2023 had reached 595 million.
Circle filed to go public for the first time by filing a confidential draft S-1 document with the SEC in January of this year. The number of shares to be offered and the price range for the planned offering have not yet been determined, and the exact timing of the IPO is unknown.
*This is not investment advice.
