USDC-Issuer Circle Prepares for IPO, but Secondary Market Valuation Drops to $5B

The privately held stocks of Circle Internet Financial, the issuer of the USDC stablecoin, are trading between the valuation of $5 billion and $5.25 billion, according to a report by Coindesk, which cited “three people with knowledge of the matter.” The reported figure is a massive drop from the $9 billion valuation the company sought in its failed SPAC deal in 2022.

Valuation Must Not Drop $5B

The report further outlined that early-stage investors or Circle employees are mostly liquidating their holdings in the company in the secondary markets. Interestingly, Circle, which is planning to go public in the US with an initial public offering (IPO), is not allowing the secondary market to trade below a $5 billion valuation.

Circle, established in 2013, is the second-largest stablecoin issuer. The market capitalisation of its USD-pegged stablecoin is almost $33.5 billion. For the governance of USDC, Circle and the crypto exchange Coinbase initially jointly managed Centre Consortium, which was shuttered last August. Coinbase now holds an unknown equity stake in Circle.

Preparations for IPO Are Ongoing

Meanwhile, Circle is preparing for an IPO, aiming to become a publicly listed company in the United States. The company officially confirmed that it confidentially submitted a draft registration statement on Form S-1 with the SEC for a prospective IPO.

It is Circle's second attempt to go public. Previously, it partnered with Concord Acquisition Corp., a blank-check firm led by Bob Diamond, the former CEO of Barclays. However, the deal failed to receive a regulatory greenlight following the collapse of FTX.

According to Crunchbase, Circle has raised $1.1 billion in funding to date. Reports also suggest that it secured funding at a valuation of $7.7 billion last year from heavyweights like Goldman Sachs, General Catalyst, BlackRock, Fidelity, and Marshall Wace.

Now, it is to be seen how Circle values itself when it reveals the details of the upcoming potential IPO. Notably, private secondary market valuations do not always dictate IPO valuations.