Crypto Investment Firm Circle Seeking $250 Million Ahead of Possible IPO

Omar Faridi
  • Circle Internet Financial is planning to raise an extra $250 million to fund ongoing expansion operations.
  • Circle's last valuation was nearly $3 billion, and to date it has raised $246 million.

Founded in 2013, Boston-based fintech firm Circle Internet Financial is reportedly looking to raise $250 million in order to further expand its operations and product offerings.

According to a report published on March 2 by The Information, Circle’s fundraising round will consist of equity and debt financing. To date, Circle has managed to raise approximately $246 million from several prominent investment firms including giant Wall Street investment bank Goldman Sachs, the Digital Currency Group, and Pantera Capital.

In its most recent Series E fundraiser, Circle was able to acquire $110 million in investment from a diverse group of investors at a valuation of almost $3 billion. Circle’s decision to seek additional funding before its initial public offering (IPO) may be part of the company’s business strategy to gain a larger market share on San Francisco-based crypto exchange Coinbase and other competing crypto-related firms.

At present, Circle’s management operates a number of subsidiaries including Circle Invest, Circle Trade, and digital asset exchange Poloniex which was acquired in 2018.

In early January 2019, Circle revealed that it facilitated the trade of approximately $24 billion in cryptocurrency through its over-the-counter (OTC) trading desk. According to an official blog post published by Circle’s founders, Sean Neville and Jeremy Allaire, the company helped process more than 10,000 OTC trades “across 36 different cryptoassets” with “nearly 600 distinct counterparties.”

Circle's Founders Anticipating Further Incremental Growth This Year

As explained in Circle’s blog, the payments technology firm offers liquidity to large cryptoasset exchanges, cryptocurrency miners, and blockchain project developers. The crypto-focused personal finance firm also provides liquidity services to the “new cryptoasset investor base of venture capitalists, crypto funds, hedge funds, and family offices” across the globe.

Explaining the American fintech firm’s business strategy and overall approach to the crypto sector, Circle’s blog post mentioned: 

This year, we anticipate further incremental growth in institutional adoption catalyzed by stablecoin usage, advancements in institutional custody solutions, increasing regulatory clarity particularly in the [United States], and improvements and innovation in core crypto infrastructure.

Fighting Market Manipulation, Seeing Crypto As "Transformative"

On January 23, Circle CEO Jeremy Allaire told world leaders at the World Economic Forum in Davos, Switzerland:

We see crypto as much more transformative even [when compared to the world wide] web. It will have a far greater impact on our civic institutions, our economic institutions, and on the nature of the firm itself.

As CryptoGlobe reported recently, Circle is also planning to fight crypto market manipulation tactics including insider trading and “pump and dump” schemes through advanced market surveillance tools. The payments technology firm reportedly intends to use digital financial services firm Nice Actimize’s tools to help prevent exploitative activities in the volatile crypto market.

Zuckerberg Says Libra Can Boost Facebook's Ad Revenue, China Sees It as a Much Bigger Deal

Facebook CEO Mark Zuckerberg has, during a shareholder meeting, explained how the Libra cryptocurrency project will help the social media giant make money. China, on the other hand, published a book addressing the challenges Libra poses, arguing it could become the future of world currency.

In a transcript posted by Thomson Reuters, we can read Zuckerberg replied to a question asked by a shareholder on how Facebook will be making money off of the Libra cryptocurrency project. Zuckerberg responded by going into Libra’s potential impact on e-commerce on Facebook, and its potential impact on advertising revenue.

According to the social media giant’s CEO, Facebook does not charge a set price for ads and instead works with a bidding system, where every business trying to advertise will bid to compete for ad space. The system, Zuckerberg said, allows them to get the “lowest possible price.”

He added that combining ads with an effective payment tool such as Libra can benefit businesses further as it could make commerce more efficient:

If we can make commerce be more effective for businesses if when they run an ad, somebody who clicks on that ad is now going to be more likely to buy something because they actually have a form of payment that works that’s on file.

Advertising on Facebook, as such, becomes more worthwhile for businesses, which could in turn see them bid higher on ads and increase overall ad prices. This would effectively boost Facebook’s 0s advertising revenue.

Zuckerberg also reiterated other advantages of Libra, pointing out the payments infrastructure “hasn’t been updated in a very long time.” China, which has plans to launch its own digital currency called DCEP, sees Libra as more than a way for Facebook to make money.

Libra Could Hit China’s Efforts to Increase Yuan Influence

In a book published by the Central Party School of China to educate government officials on digital currency and propose policy measures to deal with emerging challenges like the Libra project, experts argue the latter is an excellent example of a public-private partnership and has the potential to become the future of world currency.

This would mean, according to the book titled “Discussing Digital Currency with Leading Officials,” that Libra could get in the way of the Chinese government’s attempt to increase the influence of the yuan.

Hongzhang Wang, former chairman of the China Construction Bank and one of the authors on the book’s preface, said in a recent article:

China originally relied on mobile payment to get ahead, but now Libra has the potential to change the game again.

Wang added that this would allow companies in the U.S. to build a digital currency system that could “threaten or even surpass” Alipay and WeChat Pay using blockchain technology.

Featured image via Unsplash.