Coinbase is raising equity capital by issuing Class A common stock in April 2021 on the Nasdaq Stock Market through a direct listing instead of an Initial Public Offering (IPO). This will be the first crypto-centric company to go public, setting the stage for many more to come in the near future as crypto assets such as Bitcoin, NFTs, and Etherum are taking the world by storm.
Coinbase Global Inc. is the second largest cryptocurrency exchange in the world by volume of transactions per year, just behind China’s Binance. By February, Coinbase facilitates around $456 billion transactions and hosts more than $90 billion in assets on their platform. These assets include fiat currencies, Bitcoin, Ethereum, Litecoin, and other cryptocurrencies, stablecoins, and Non-Fungible Tokens (NFTs). The company is now operating across more than 100 countries, with more than 1,200 employees serving more than 43 million verified users on the crypto platform.
Coinbase allows its users to store, buy, sell and exchange digital currencies and assets. Coinbase CEO Brian Armstrong describes Coinbase as the company that provides more “economic freedom for people and businesses”. “The current financial system is rife with high fees, delays, unequal access and barriers to innovation … Economic freedom is a necessary, if not sufficient, condition for human progress … Higher economic freedom correlates with the kind of societies that we all aspire to create. Our job at Coinbase is to help make this future a reality.” says Armstrong in the company’s S-1 Form.
According to the company’s S-1 Form filed for direct listing, Coinbase focuses on tailoring their services and products to 3 main different customer segments:
Retail users: Coinbase offers the primary financial account for the crypto economy – a safe, trusted, and easy-to-use platform to invest, store, spend, earn, and use crypto assets.
Institutions: Coinbase provides hedge funds, money managers, and corporations a one-stop shop for accessing crypto markets through advanced trading and custody technology, built on top of a robust security infrastructure. We also offer a state of the art marketplace with a deep pool of liquidity for transacting in crypto assets.
Ecosystem partners: Coinbase provides developers, merchants, and asset issuers a platform with technology and services that enables them to build applications that leverage crypto protocols, actively participate in crypto networks, and securely accept cryptocurrencies as payment.
With the April listing on the horizon, investors are eyeing for the estimated listing price. Coinbase Global Inc.’s listed price will be determined by Nasdaq after a consultation with a range of bulge bracket investment banks including Goldman Sachs, JP Morgan, Allen & Co., and Citigroup.
The company’s direct listing will raise the bar for other crypto or blockchain focused companies. With the entry into public equity markets, Coinbase is furthering their mission to provide open finance for retail investors all around the world.
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