Circle Internet Financial Ltd. plans to raise hundreds of millions of dollars in the capital as the Boston crypto startup moves forward with a revised reverse-merger deal.
 

Circle said Tuesday it had entered into an agreement to raise $400 million in new funding round, which is expected to close in the second quarter. BlackRock Inc., Fidelity Management and Research, Marshall Wace LLP, and Fin Capital are investing.

The fundraising news comes to a couple of months after Circle had announced the postponement of a planned public-markets debut.

Circle signed a new deal with its unique purpose acquisition of choice, Concord Acquisition Corp. (NYSE: CND), with a revised enterprise value of $9 billion and the timing of the SPAC deal to later this year or early next year.

A spokesperson for Circle confirmed via email on Tuesday that Circle still plans to go public and is moving forward with the revised SPAC deal.

However, she noted that the private investment in public equity, or PIPE, originally planned alongside the original deal with Concord, "fell away" under the new agreement. The original SPAC transaction had included a PIPE of $415 million.

"We chose to fundraise privately ... today rather than as a forward fundraise at some unknown future date," the spokesperson wrote.

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SPAC sponsors sometimes will seek debt or PIPE funding in addition to the original capital not only to help fuel growth for the combined entity post-merger but also as a vote of confidence for those involved in the SPAC deal.

The additional funding source allows investors to buy shares in the company, often at discounted prices compared with the market.

If the agreement is approved and the merger is completed, the SPAC and PIPE proceeds are invested in the target company (after various deductions).

Circle has 83 full-time employees in Bay State. In 2018, it launched the digital currency USD Coin, or USDC, with crypto exchange platform Coinbase Global Inc. (Nasdaq: COIN). USDC is a so-called "stablecoin," as it is redeemable on a 1:1 basis for U.S. dollars.

In addition to the capital raise, Circle has also entered into a broader strategic partnership with investment firm BlackRock to explore capital market applications for USDC. According to a release, BlackRock is also the primary asset manager of USDC cash reserves.

"This funding round will drive the next evolution of Circle's growth," said Jeremy Allaire, co-founder, and CEO of Circle, in a statement. "Dollar digital currencies like USDC are fueling a global economic transformation, and Circle's technology infrastructure sits at the center of that change."

- The Business Journals

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