Circle smells the bull market and is preparing for another IPO?

According to Bloomberg, stablecoin issuer Circle is reportedly considering an IPO in early 2024. After struggling and ultimately abandoning plans to go public through a special purpose acquisition company at the end of 2022, could Circle have foreseen the dawn of a bull market?

Circle's Failed Attempt to Go Public Through SPAC in 2022

Bloomberg cited sources familiar with the matter that Circle is consulting with advisors to prepare for a potential initial public offering (IPO). As the consultation is still ongoing, it is uncertain whether Circle will decide to proceed with the listing.

Going public in the U.S. has always been Circle's vision. In 2022, Circle attempted to go public through a Special Purpose Acquisition Company (SPAC) called Concord Acquisition Corp, but ultimately announced the temporary abandonment of the listing plan at the end of the year due to unfavorable market conditions.

Circle's CEO Jeremy Allaire stated at the time:

We are disappointed that we did not go public as planned, but we will continue to work towards becoming a public company. Going public is our core strategy, which will increase the company's transparency and strengthen market confidence.

Circle's Operating Conditions at the Time

At that time, Circle submitted documents to the SEC, compiling its financial condition and operating model in an 813-page report.

Deep Dive into Circle's Financial Report: Is Stablecoin a Good Business? Insights into Circle's Business Model from its Financial Report

Although Circle's gross profit margin reached 66%, high operating expenses such as personnel management and digital asset accounting losses made Circle in a situation where expenses exceeded revenue. Its cost-to-income ratio was as high as 258%, far exceeding the breakeven point of 100%.

According to Bloomberg, its valuation at that time was approximately $9 billion.

Revisiting the Public Listing, Bull Market Ahead?

The U.S. compliant exchange Coinbase officially invested in Circle in August this year. The two parties had previously jointly established the Center Consortium in 2018 to manage the stablecoin USDC. Through the new investment partnership, Circle will continue to act as the issuer of USDC, incorporating the governance and operational responsibilities of the Center into Circle. The new structure will streamline operations and governance, and strengthen Circle's direct responsibilities as an issuer, including holding all smart contract keys, complying with reserve governance regulations, and enabling USDC on new blockchains.

Coinbase Invests in Circle, Collaborating on USDC Ecosystem Development

According to a report by Axios, in a financing round in 2022, Circle raised $400 million from financial institutions such as Goldman Sachs, BlackRock, and Fidelity, with the company valued at $7.7 billion.

After another year, as Circle seeks to go public again, has its operating conditions improved? Or does it sense the trace of a bull market? Will the uncertain regulatory issues become another obstacle for Circle's listing?

However, the market value of USDC has plummeted from $55 billion in mid-2022 to approximately $24 billion, evaporating more than half of its value.