Coinbase Global, the biggest US cryptocurrency exchange, filed to go public via a direct listing, showing a swing to profitability last year as the price of Bitcoin soared.
In what’s anticipated to be a breakthrough moment for the industry, Coinbase filed with the US Securities & Exchange Commission on Thursday to list its shares on the Nasdaq. The company has been valued at more than $100 billion in recent private transactions, Axios reported, meaning it could be one of the biggest companies to go public since Facebook.
Coinbase’s revenue more than doubled last year from 2019 as it swung to a profit amid a boom in cryptocurrency trading. The company reported a net income of $322 million on net revenue of $1.14bn for 2020, compared to a net loss of $30m on revenue of $483m a year earlier.
It has 43 million verified users, of which 2.8 million transact on the platform monthly, the filing shows. A majority of its net revenue is derived from transactions in Bitcoin and Ethereum.
Bitcoin traded at around $50,000 on Thursday after hitting an all-time high of $57,355 on February 21, meaning its value has increased by more than 400 per cent over the last year. Cryptocurrencies have been buoyed by the tide of monetary and fiscal stimulus aimed at fighting the effects of the pandemic.
Among the potential risk factors that could affect its plans, Coinbase listed the volatile nature of cryptocurrencies as the main concern.
“If demand for these crypto assets declines and is not replaced by new demand for crypto assets, our business, operating results and financial condition could be adversely affected,” the filing shows.
The offering could be the first major direct listing to take place on the Nasdaq. All previous ones, including Spotify Technology, Slack Technologies, Asana and Palantir Technologies, were listed on the New York Stock Exchange. Online video game company Roblox has also announced that it’s planning a direct listing, after earlier delaying its IPO and raising capital privately.
Coinbase won’t raise any proceeds in the transaction, the filing shows. The company didn’t list an address for its headquarters, saying that instead it became a “remote-first” company in May.
Founded in 2012, Coinbase has raised more than $500 million from backers that include Y Combinator and Greylock Partners, according to its website. The company was valued at more than $8bn in 2018 after a $300m funding round led by Tiger Global Management. Andreessen Horowitz, Tiger Global, Ribbit Capital, Union Square Ventures and co-founder Frederick Ernest Ehrsam III are listed among its biggest shareholders, the filing shows.
Owners of Coinbase’s Class A common stock will be allowed to sell in the listing. Class A stock carries one vote per share, while Class B has 20, according to the filing.
Coinbase will be listed under the symbol COIN. Goldman Sachs Group, JPMorgan Chase, Allen & Co and Citigroup are advising on the transaction.
