Dive Brief:

• Stablecoin issuer Circle Internet Group filed S-1 paperwork with the Securities and Exchange Commission Monday for an initial public offering.
• The New York-based fintech intends to raise $624 million through the sale of its 24 million shares of Class A common stock at a price range of $24 to $26, at a nearly $6 billion valuation, according to the amended SEC filing.
• Circle plans to list its shares on the New York Stock Exchange under the ticker symbol CRCL.

Dive Insight:

Circle’s IPO comes close on the heels of fintechs eToro and Chime, both of which filed paperwork related to their public offerings earlier this month, suggesting market conditions appear favorable to go public. 

eToro, a social investment fintech founded in Israel, said it intended to raise $500 million through its public offering. eToro’s stock opened at $69.69, which was 34% above its IPO, and closed at roughly $67 per share, bringing its total market capitalization to more than $5.4 billion.

Chime, for its part, said the number of shares to be offered and the price range for the proposed offering had not yet been decided.

“In many respects, Circle has for a long time been under intense public scrutiny — the demands of operating an always-on, regulated digital dollar infrastructure require that Circle operates with high levels of transparency —as well as significant regulatory supervision by government agencies spanning the United States and the world,” Circle’s co-founder and CEO, Jeremy Allaire said in the filing.

The fintech that doesn’t “fit in a box” from a public market perspective is a mix of a payments company, a financial institution, and a consumer internet and platform software company, according to Allaire.

“Going public now is representative of the fact that we are at a significant crossroads for Circle and the development of the internet financial system,” Allaire wrote Monday.

“While we are proud and confident about our ability to pursue this opportunity, our future (like our past) is rife with uncertainties and risks that we must navigate successfully,” he wrote.

The potential offering values the company at roughly $5.65 billion at the top end of the price range, but when accounting for stock options and restricted share units, the valuation would be about $6.7 billion, according to Bloomberg.

Circle was co-founded by Allaire and Sean Neville in 2013. There was around $60 billion of Circle’s USD Coin in circulation as of the end of March, according to an SEC filing.

Days prior to filing IPO paperwork, Circle denied a report it was in talks to sell to Coinbase Global or Ripple.

Circle has been pursuing an IPO since 2021. An original agreement announced in July 2021 was revised the following year, thereby delaying the company’s IPO and renegotiating its original agreement with special-purpose acquisition company Concord Acquisition, doubling Circle’s enterprise value from $4.5 billion to $9 billion. The revised valuation was due the circulation of USDC more than doubling after the deal was first announced.

However, that $9 billion deal fell apart in December 2022.

Circle said in Monday’s filing that Cathie Wood’s Ark Investment Management has expressed interest in buying up to $150 million of the shares that are offered. Circle also said it will give underwriters 30 days to purchase an additional 3.6 million Class A common stock to cover over-allotments. 

BlackRock reportedly plans to buy a 10% stake in Circle’s IPO, some people familiar with the matter told Bloomberg.

Circle estimates the net proceeds from the offering to be roughly $213.2 million or $298 million if the underwriters exercise their option. The fintech plans to utilize nearly $101 million of the net proceeds to satisfy tax withholding and remittance obligations related to vesting and net settlement of certain outstanding restricted stock units previously granted to its employees, and the remainder for general corporate purposes.

Last week, the company launched Circle Payments Network, a new service that aims to connect eligible banks, neobanks, payment service providers and digital wallets to process payments instantly across borders using stablecoins like USDC. The company noted that banks and neobanks play an increasingly important role in the Circle stablecoin ecosystem, providing settlement and reserve infrastructure. 

“We are seeing growth in startup banks and neo-banks in many emerging markets focused on providing digital dollar payment and settlement services using USDC and the Circle stablecoin network,” Circle said in the filing.

The latest IPO filing occurs as the cryptocurrency and digital asset regulatory landscape in the U.S. evolves following the election of President Donald Trump. In January, the SEC launched a crypto task force dedicated to developing a comprehensive and transparent regulatory framework for digital assets. Following the task force announcement, Trump signed an executive order establishing a new working group on digital asset markets.

Circle is hopeful that a comprehensive regulatory framework for payment stablecoins will be established, it said in the filing. 

While the final version of the Guiding and Establishing National Innovation for U.S. Stablecoins Act is not published yet, any version of the law “should drastically increase the odds of successful crypto company IPOs,” since market participants are looking forward to certainty and stability that would be provided by implementation of a federally-authorized regulatory framework, Patrick Hanchey, a partner at law firm Alston & Bird noted.

“I don’t foresee any circumstances where the establishment of a formal regulatory regime around stablecoin could slow or discourage market participation in this sector, especially under the current administration,” Hanchey said in an email response.

The IPO is being led by JPMorgan Chase, Citi and Goldman Sachs.