Fintech startup and USDC stablecoin backer Circle terminates $9 billion SPAC deal

In February, fintech startup Circle doubled its valuation to $9 billion following a deal with blank-check company Concord Acquisition Corp, doubling its value since July 2021 when the initial agreement valued the company at $4.5 billion. Fast forward ten months after an earlier agreement was amended. The deal now appears to be dead.

Today, the backer of USDC stablecoin announced it has decided to end a $9 billion deal with blank-check firm Concord Acquisition Corp. The fintech startup did not elaborate further on its plans to go public. Circle reported a net income of $43 million and nearly $400 million in cash in the third quarter that just ended.

The announcement comes at a time when crypto winter has wiped away nearly $2 trillion from the markets’ valuation. Bitcoin, the world’s largest cryptocurrency, has also lost more than 75 percent from its record high of $69,000.

“We are disappointed the proposed transaction timed out, however, becoming a public company remains part of Circle’s core strategy to enhance trust and transparency, which has never been more important,” said Jeremy Allaire, Co-Founder and Chief Executive Officer of Circle.

Sometimes called a blank-check company, SPAC is a shell company that has no operations but plans to go public with the intention of acquiring or merging with a company utilizing the proceeds of the SPAC’s initial public offering (IPO). So far this year, there are SPAC 29 deals, according to data from the SPAC analytics firm, SPACAnalytics.com.

Stablecoins, especially Circle’s stablecoin USDC, has increased in reach and popularity over the years. Crypto-day traders typically use Stablecoins as safe haven by shifting their unstable tokens to safe real currencies (like the dollar) because wild market fluctuations make it unsafe to hold. Unlike regular cryptocurrencies like Bitcoin and Ether, stablecoins are cryptocurrencies without volatility.

“We continue to believe that Circle is one of the most interesting, innovative, and exciting companies in the evolution of global finance and we believe it will have an historic impact on the global economic system,” said Bob Diamond, Chairman of Concord Acquisition Corp and CEO of Atlas Merchant Capital. “Circle’s rapid growth and world-class leadership are underscored by a regulatory-first mindset fixed on building trust and transparency in global markets. We believe our new deal is attractive because it preserves the ability of Concord’s public stakeholders to participate in a transaction with this great company.”

“Circle has made massive strides toward transforming the global economic system through the power of digital currencies and the open internet,” said Jeremy Allaire, Circle’s co-founder and CEO. “Being a public company will further strengthen trust and confidence in Circle and is a critical milestone as we continue our mission to build a more inclusive financial ecosystem. Making this journey with Concord under our new agreement is a strategic accelerator.