Circle Internet Financial is now considering various options as it pursues a $5 billion valuation. The crypto company behind the USDC stablecoin officially filed for an IPO in early April this year. Even so, latest reports indicate that Circle could forego its IPO idea and sell itself to a prominent crypto industry player instead.
Sources in banking and private equity report that Circle engaged in informal talks with Coinbase and Ripple. The latter tendered an acquisition offer ranging from $4 to $5 billion, which Circle rejected for being below its target. Ripple’s acquisition bid included XRP tokens and cash, taking advantage of the firm’s substantial crypto assets.
Coinbase, the leading crypto exchange in the U.S., previously held a more profound connection to Circle going back to their 2018 joint venture. That joint venture, called Centre Consortium, served as a major factor in launching USDC. Although that consortium dissolved in 2023, Coinbase still held an equity interest in Circle and still earns a percentage of the reserve interest income from USDC.
Coinbase, Ripple expand through major acquisitions
However, CEO Brian Armstrong said there is nothing to announce as of now, but the company is welcoming to acquisitions. Coinbase holds $8 billion in cash and has the capacity to raise even more through stock or debt. Latest filings indicate a growth in USDC-related revenues, particularly when held on Coinbase itself.
In contrast, Ripple holds a war chest in XRP that is over $100 billion in size, and most is in escrow. Ripple just tried a big acquisition play and came up short in trying to meet Circle’s valuation threshold. Nonetheless, the company is still busy broadening its horizons as evidenced by its $1.25 billion acquisition of Hidden Road.
Coinbase is not lagging behind either in making acquisitions with Deribit for $2.9 billion and smaller acquisitions as Spindle and Iron Fish. The IPO space is also picking up slowly with eToro’s $620 million listing, but that of Circle is still uncertain on whether or not it is going to go public or be merged into a major crypto company.
