Circle operates as a decentralized peer-to-peer payment ecosystem. It has been a pioneering effort in the market for over a decade. Today, the platform is best known as the issuer of the stablecoin USDC. USDC is one of the top-performing regulated stablecoins in the world. It’s used by millions of people daily and is widely accepted across the decentralized economy. Circle’s commitment to innovation and transparency makes the prospect of an IPO exciting. As such, there’s a lot of demand for pre-IPO shares of this fast-growing market leader.
In July 2021, Circle announced that it would go public. At the time, the IPO would involve merging with Concord Acquisition Corp. In total, the merger would’ve been valued at $4.5B. However, the plans were called off in December 2022, leaving many investors seeking pre-IPO solutions. Here’s what it takes to get your hands on Circle’s pre-IPO shares.
What is Circle?
Circle entered service in 2013 as an open and permissionless digital payment ecosystem. The project quickly garnered media attention as it was the first recipient of a BitLicense from the New York State Department of Financial Services. Notably, the Circle Pay dapp gained popularity because it enhanced the usability and accessibility of decentralized payment solutions to businesses, which helped to drive adoption.
Source – Circle
Circle partnered with Coinbase, North America’s largest CEX (centralized exchange), in September 2018 to launch the stablecoin USDC. USDC is fully licensed and regulated across the US and other nations. It’s among the most reputable stablecoins in the market and features a 1:1 peg to the US dollar.
Circle secured a reputation for transparency and security thanks to its open business model. For example, the Circle Mint protocol allows anyone to convert funds between USD and USDC seamlessly. Once converted to USDC, businesses and users can send value globally in seconds for less than a cent. Additionally, integration was a prime concern for USDC developers, who wanted to ensure rapid global payments and 24/7 financial markets.
Circle users may also leverage USDC as collateral to launch proprietary dollar-backed financial services that can operate seamlessly across applications and networks. Anyone can create purpose-built applications that empower clients while leveraging the advantage that USDC brings to the market. This openness enabled USDC to overtake Tether (USDT) in transaction volume in 2024.
Historical Funding Rounds
Summary of Circle Funding:
- Total Funding: Circle has raised a total funding of $1.01B over 6 rounds.
- Largest Round: Circle’s largest funding round was a Series E held on April 12, 2022, that secured $440M
- Investors: A total of 47 institutional investors backed Circle
- Latest Round: The last funding round was a Series E round held on Aug 22, 2023, that secured an undisclosed amount.
Funding Rounds Breakdown:
Key Investors:
Circle has received funding from many prominent investors, including Coinbase, BlackRock, Fin Capital, Fidelity Investments, Marshall Wace, Fidelity Investments, Marshall Wace, Willett Advisors, Atlas Merchant Capital, Digital Currency Group, FTX, Breyer Capital, Valor Capital Group, Pillar VC, BITMAIN, and Alameda Research.
Funding Data is Sourced from Tracxn
Why Invest in a Circle?
There are several reasons why investing in Circle could make sense. As the market front-runner, Circle is always within the top 3 stablecoin contenders. It has a proven security track record and is backed by some of the biggest names in the industry. Other reasons why investors would seek out pre-IPO Circle shares include:
Largest Stablecoin Issuer: USDC has outgrown competitors without shrinking away from its commitment to users. The stablecoin is accepted globally and continues to be a critical component in new dapps.
Transparency: Cirlce has USDC reserves held in an SEC-registered 2a-7 government money market fund called the Circle Reserve Fund (USD XX). This fund is monitored by third parties which give daily updates to the community.
Unmatched Interoperability: Circle’s network and market positioning continues to expand. The platform now has assets on +15 blockchains. Specifically, Algorand, Arbitrum, Ethereum, Hedera, NEAR, Noble, OP Mainnet, Polkadot, Polygon PoS, Solana, Avalanche, Base, Celo, Stellar, Sui, and Zksync support USDC at this time. This expansive network of blockchain users and developers has helped Circle remain a prominent force in the community.
Daily Users: There’s currently +$34.37B USDC in circulation and $34.59B in reserves. The project overtook USDT this year in terms of transaction volume largely due to its added transparency and integration into new blockchain ecosystems. This strategy will continue to work for Circle as demand for USDC and other decentralized payment solutions is rising.
Customizable: The open nature of the Circle ecosystem makes it an ideal solution for businesses seeking to integrate faster and more efficient payment methods. Companies can enhance their UX by offering dollar payments and financial services across a variety of assets in a p2p manner.
How to Buy Circle Pre-IPO Shares
Circle may have called off its first IPO, but hopes are high that the company will return to this strategy in the coming months. As such, Circle remains a privately held company, meaning that you will need to utilize a specialized approach to get access to shares. Here is what you need to consider.
1. Pre-IPO Secondary Marketplace
Secondary markets are purpose-built exchanges that connect pre-IPO shareholders with potential investors. These marketplaces can offer these assets because they work closely with employees, early-stage investors, and venture capitalists, which are crucial to the company’s pre-IPO growth.
Investing in pre-IPO shares for Circle could open the door for additional ROIs if the company’s valuation is less than when its IPO launches. It’s common for company valuations to increase following an IPO. As such, it makes sense to add pre-IPO shares to your portfolio before the firm announces plans to go public.
Secondary marketplaces have many requirements. Here are some concerns you should be made aware of:
Eligibility: Notably, this approach requires you to be an accredited investor, meaning you will have to show at least $1M in liquid assets to qualify.
Liquidity: Pre-IPO shares can’t be traded like regular shares. They often include some lockup restrictions that prevent you from trading them before the IPO. Some firms have permanent “no sell” clauses that prevent any transfer of the shares following your investment.
Linqto is a reputable investment platform that connects accredited investors with pre-IPO shareholders in a secure manner. The network streamlines pre-IPO investing via an easy-to-navigate interface that provides access to all relevant data at a glance. Accredited investors seeking pre-IPO shares in Circle should consider Linqto.
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2. Private Equity Firms
Private equity firms gain access to pre-IPO shares during investment rounds. They then offer these shares to high-net-worth accredited investors with a commission. Notably, private equity firms are known to have extra stipulations, including blocking the sale of shares for years in some cases.
3. Employee Equity Sales
Many consider employee equity sales as the best way to acquire pre-IPO shares in Circle. This method of acquiring pre-IPO shares requires you to connect with former employees. It’s common for companies to issue shares as part of an incentive package. Notably, this profit-sharing method has become more popular, leading to more pre-IPO share opportunities for investors.
Private Transactions: there are a lot of hoops you will need to jump through to complete a private pre-IPO transaction, including creating specific legal agreements, conducting valuations, and setting in place any limitations on the transfer of the asset.
Brokerage: Brokers will take a lot of the confusion out of the pre-IPO process. These professionals can guide you through each step, ensuring full compliance and avoiding common errors untrained professionals make.
There are several risks that you should consider before jumping into the pre-IPO shares investment arena. Here are the top concerns:
Liquidity Risk
If you are looking for an asset that you can sell right away, pre-IPO shares are not the best option. These investments can include sales and transfer clauses that prevent the transfer of the asset until certain criteria, such as the IPO’s completion. It’s even common for pre-IPO shares to require you to wait years before gaining the ability to sell your assets.
Regulatory Risk
The blockchain market has seen considerable scrutiny from regulators and lawmakers. While the technology is far better understood than in its early days, there are still many lawmakers who see it as a threat to the traditional financial system, As such, you need to always consider how new regulations could affect the value of your pre-IPO shares.
Market Risk
Purchasing pre-IPO shares in Circle means that you stand behind the project and its team. The company has secured a reputation for excellence and has previously expressed a desire to go public. However, no concrete data has been provided yet. As such, it’s vital to understand that the blockchain market is an active space that experiences strong fluctuations that could result in a different share value between now and any future IPO launch.
Valuation of Circle and Future IPO
Circle has a valuation of $9B as of February 2022. This valuation places it in Unicorn status. The company obtained this value through its Circle pay features and the USDC stablecoin project. Together, these products have empowered the blockchain community and driven adoption.
There is a lot of speculation regarding when Circle will go public. Given That the company had already announced plans years ago, it’s highly likely that the firm will make the maneuver sooner rather than later. As USDC sees more integration into the blockchain market, the demand for Circle to go public should increase as well.
If Circle would commit to an IPO date, it could be one of the most anticipated projects to go public. Notably, Circle has pioneered the blockchain payment sector and its pre-IPO shares could see massive demand from the community. This demand would grow as more nations, businesses, and users join the blockchain economy via Circle offerings.
Conclusion
Investing in Circle pre-IPO shares could open the door for major benefits in the future. However, there are some risks that you can’t ignore. Circle remains a prominent innovator that has set the pace for the stablecoin movement. Now, the company wants to take its blockchain services and integrate them across every industry, enhancing payment solutions globally. If successful, Circle will remain a dominant player in the market for the foreseeable future.
You should always do your own research before making any pre-IPO investments. It’s also recommended that you consult a financial expert to ensure that you remain within your risk tolerance and investment strategy goals. For those willing to take on the pre-IPO risks, Circle could provide some upside potential.
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Disclaimer: This article is for informational purposes only and does not constitute financial, legal, or investment advice. Pre-IPO shares are typically available only to accredited investors and carry significant risk. Always perform thorough due diligence and consult a financial advisor or legal expert before making investment decisions.
