- Circle would go public utilizing a special purpose acquisition company (SPAC).
- USDC is only the second-biggest contributor to the top line.
Mostly Circle revolves around USD coin (USDC), the stablecoin it developed in collaboration with Coinbase. As per an investor presentation, Circle will go public utilizing a special purpose acquisition company (SPAC), the company has three lines of business, all creating growing revenue. Among those, USDC is only the second-biggest contributor to the top line.
Moreover, Circle has been important on the more corporate and institutionally aimed side of the crypto industry. Furthermore, initiated by Jeremy Allaire and Sean Neville as a peer-to-peer payment firm that had a strong bitcoin orientation. More so, it has evolved into an infrastructure firm supporting most blockchain companies. In addition, infrastructure work appears to be its strongest area for the growth of revenue.
Even more, the Boston-based firm generates income in three ways. They include transaction fees on USDC and interest earned on its reserves; transaction and treasury services (TTS); and SeedInvest, the equity crowdfunding platform it purchased in 2019.
Added to this, its transaction and treasury services is the least understood and least detailed part of its offerings.
Investor presentation said,
“Circle Accounts and API services provide companies with a comprehensive suite of payments and treasury services.”
In line with this, the presentation lists Compound Labs, Dapper Labs, and FTX among the TTS business’ clients. Moreover, the slide deck does not provide prior-year results. However, it estimates that Circle will generate $115 million in revenue in 2021, and end the year with a $76 million loss.
From those revenues, it expects $40 million to come from USDC, $65 million from TTS, and $10 million from SeedInvest. Furthermore, the company also projects $76 million in earnings before interest, taxes, depreciation, and amortization (EBITDA) on $886 million in total revenue across the three business segments by 2023. From that, it expects TTS to be by far the largest line of business.