Cryptocurrency payment service firm Circle is reportedly is reportedly seeking fund injection of up to $250 Million in the coming weeks. According to tech news outlet The Information, Circle which boasts financial support from Goldman Sachs are considering a combination of equity and debt to source for funds, citing “a person with direct knowledge of the plans.”
Last time Circle raised $110 million in a Series E funding round led by the crypto mining and hardware manufacturer Bitmain. As reported, the crypto payment provider raised the funds in other to launch its own stablecoin—a digital currency pegged at the value of the U.S. dollar. During the funding round, Circle was valued at $3 billion.
In total, Circle has raised $246 million to date from investors including Bitmain, Baidu, IDG Capital and Goldman Sachs (mentioned earlier).
The source did not disclose the valuation for the next funding round if Circle decides to take that route. In its New Year update in January, Circle disclosed that it facilitated $24 billion in a notional volume of trades in 2018. The company earns through trading fees charged on its trading services on Circle and Poloniex exchange which it acquired last year. The platform provides liquidity for crypto miners, exchanges, project developers, and founders as well as institutional investors getting involved with cryptocurrency.
The company which maintains around 300 staff in offices across the world have made some major expenses recently including the acquisition of crowdfunding platform SeedInvest. The downturn in crypto prices has affected most crypto businesses which have led to cost-cutting measures in major companies. Circle’s business may be affected by the considerably lower crypto trading volumes since crypto markets slumped.
According to The Information, Circle’s co-founder Jeremy Allaire confirmed during an interview last week that the company’s revenue grew between 2017 and 2018 despite the fall in crypto prices. During the interview, Allaire said the company was always looking for different sources of capital but he declined to go into details.
The Information notes that Circle may not be able to raise money now or will have to accept a lower valuation. Kraken exchange recently said it raised $100 million at a valuation of $3.9 billion.
Note: Information from theinformation.com was used in this report
Riccardo Lopp is a writer specializing in Crypto, ethereum and whole blockchain ecosystem. His background is in economics and statistics.
