Circle raises $1.1 billion in upsized IPO, prices shares at $31

Circle Internet Group Inc., a prominent player in the stablecoin arena, successfully navigated its initial public offering (IPO), raising nearly $1.1 billion in an upsized deal that saw shares priced above the initially marketed range.

This strong market reception is being interpreted as a significant indicator of the increasing acceptance and perceived legitimacy of stablecoin issuers within the broader financial landscape.

The stablecoin firm, along with some of its existing shareholders including co-founder and Chief Executive Officer Jeremy Allaire, sold a total of 34 million shares on Wednesday at a price of $31 each, according to a statement confirming an earlier Bloomberg News report.

This pricing gives Circle a market valuation of approximately $6.9 billion based on the outstanding shares detailed in its regulatory filings.

When accounting for employee stock options, restricted share units, and warrants, the company’s fully diluted valuation reaches about $8.1 billion.

The offering’s success was underscored by significant investor interest.

The upsized deal reportedly fielded demand for more than 25 times the number of shares available by the time orders closed on Tuesday, according to people familiar with the matter.

This overwhelming demand prompted Circle to increase the size and price of its IPO earlier in the week.

On Monday, the target for the offering was raised to 32 million shares at a price range of $27 to $28 per share, a notable increase from the initial plan to sell 24 million shares within a $24 to $26 price range, as indicated in its earlier filings.

In the final tally, Circle itself sold 14.8 million shares in the IPO, while the selling shareholders divested the remaining 19.2 million shares.

Regulatory tailwinds and growing institutional interest

Circle’s successful public offering comes at a pivotal time for stablecoins – digital tokens typically pegged to a fiat currency like the US dollar.

Legislation currently before the US Congress aims to regulate these assets, a development that many believe will confer greater legitimacy upon them and potentially pave the way for broader adoption.

However, this evolving regulatory landscape may also attract new and formidable competitors.

The Wall Street Journal reported last month that some of Wall Street’s largest banks are jointly exploring the possibility of issuing their own stablecoins.

Circle’s flagship product, USDC, held approximately 29% of the stablecoin market as of the end of March, according to data from CoinMarketCap cited in the company’s filing.

As of May 29, there was about $61 billion worth of USDC in circulation, according to information on Circle’s website.

The IPO has attracted notable institutional investors. ARK Investment Management, the technology-focused investment firm founded by Cathie Wood, expressed interest in purchasing as much as $150 million worth of shares in Circle’s IPO, according to the filing.

Furthermore, BlackRock Inc., the world’s largest asset manager, reportedly plans to acquire about 10% of the IPO shares, people familiar with the matter have said.

This interest is particularly significant given BlackRock’s existing relationship with Circle; BlackRock manages a government money market fund on Circle’s behalf, which holds 90% of the reserves backing its USDC stablecoin.

The Circle Reserve Fund reportedly had a balance of $53.3 billion as of May 29.

Circle’s journey to public markets

This IPO marks a significant milestone in Circle’s journey.

The company was valued at $7.7 billion after a funding round in 2022, according to data provider PitchBook.

Circle had initially filed confidentially for a listing in early 2024, more than a year after it had abandoned a previous attempt to go public through a merger with a blank-check company (SPAC).

That earlier SPAC deal would have valued the company at $9 billion.

The current IPO is being led by a consortium of Wall Street giants, including JPMorgan Chase & Co., Citigroup Inc., and Goldman Sachs Group Inc.

Circle’s shares are expected to begin trading on Thursday on the New York Stock Exchange under the ticker symbol CRCL.

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