Circle Internet Financial, a global Internet finance company and issuer of USD Coin (USDC), announced a $400 million funding round agreement, as well as a strategic partnership with U.S. asset manager BlackRock.
In a press release from Circle, the company announced that investors include BlackRock, Fidelity, Marshall Wace LLP and Fin Capital. The funding round is expected to close in the second quarter and the new funding supports Circle's continued strategic growth as demand for digital currencies and related financial services continues to grow globally. USD Coin (USDC), after all, is one of the fastest growing digital dollar currencies with over 50 billion in circulation.
Expansion of strategic partnership with BlackRock
The world's largest asset manager, BlackRock, has also entered into a broader partnership with Circle. As part of this, the New York-based company is exploring capital market applications for USDC, among other things, and aims to act as the primary asset manager for the stablecoin's cash reserves.
"Dollar digital currencies like USDC are driving a global economic transformation, and Circle's technology infrastructure is at the heart of that transformation. This round of funding will continue to drive Circle's growth. It is particularly gratifying to have BlackRock as a strategic investor in the company. We look forward to expanding our partnership." - Jeremy Allaire, Co-Founder and CEO of Circle
The latest investment underscores how Wall Street's biggest players are preparing for the broader adoption of cryptocurrencies and related technologies. Stablecoins, which are typically pegged to a government-backed currency such as the dollar or euro, are an important part of the crypto universe. According to Larry Fink, BlackRock's chief executive officer, the asset manager is exploring how digital currencies and stablecoins can be used to support their clients.
Shortcut to Circles IPO
The new agreement replaces an earlier agreement on the business combination Circles. As a result, Circle amended the terms of a proposed merger with special purpose vehicle Concord Acquisition Corp. in February. The new agreement sets Circle's enterprise value at $9 billion. This doubled the $4.5 billion originally announced in July 2021. Under the agreement, the holding company formed in connection with the original business combination will acquire both Concord and Circle and merge them into a publicly traded company. This will then be traded on the NYSE under the symbol "CRCL."
The increase in value reflects improvements in Circle's financial outlook and competitive position. In particular, the rapid growth and market share of USDC, one of the fastest growing digital dollar currencies, were key factors. USDC in circulation has more than doubled since the original announcement, reaching a peak of $52.5 billion in February 2022.
The new agreement will initially expire on December 8, 2022, but may be extended to January 31, 2023 under certain circumstances. Upon completion of the new transaction, current Concord shareholders will exchange their shares of Concord common stock for shares of the company's common stock. The transaction is subject to approval by Concord and Circle shareholders and other customary closing conditions, including regulatory approvals.
