In a bid to combat falling trade volumes and the bear market that has claimed several of its peers, Circle is reportedly trying to raise $250 million in funding according to a March 2, 2018 report from The Information.
Debt and Equity
While we are a few months into the bear market, the effects of the crash are still being felt, from bankruptcies to layoffs. Now it seems that Circle is trying to mitigate the effects by doing some fundraising.
According to a report, the firm is seeking to raise $250 million from a combination of equity and debt as a means of staying afloat. For now, most of the company’s income is gotten through fees from Poloniex, a trading platform that caters to both institutions and individuals.
They also have Circle Trade, which focuses solely on institutional trading. The company is currently valued at $3 Billion and has raised $246 million so far from backers such as Goldman Sachs, Baidu of China and IDG Capital.
Head Above Water
While these latest reports might be a source of worry for some, the management at Circle has worked hard to calm any fears of hard times.
In his interview with the Information, Circle CEO Jeremy Allaire said that the company actually saw a growth in revenue between 2017 and 2018 despite the market condition. The company is, however, exploring new sources of income as trading volumes have seen a dip in recent times and thus, their trading fees have taken a hit.
One thing the company is banking on is investments coming from their institutional clients, which Allaire says increased significantly in 2018 in an interview. By his account, Circle has over a thousand institutional clients, most of whom joined in 2018 and when Poloniex was acquired, it did not yet have the structure to accommodate institutional clients but this was added on. Along with this, the company also launched a dollar-backed stablecoin and expanded its operations to include Circle research.
“So, in 2018 we grew to over a thousand institutional clients. Now, these aren’t the BlackRocks, these are hedge funds, crypto funds, market makers, high net worth individuals, family offices in the entire crypto ecosystem that needs liquidity. So, I’d say it is institutional — what I would call quasi-institutional,”
Hopefully, with this latest funding round, the company can expand even more on their efforts and emerge from the bear market victorious.