Coinbase Global, the biggest U.S. cryptocurrency exchange, is planning to go public through a direct listing.
It would be the first cryptocurrency exchange to tap the public markets to raise cash.
The San Francisco-based company previously filed its registration documents with the Securities and Exchange Commission, though it hadn’t specified that it would pursue a direct listing instead of a standard initial public offering.
Coinbase quickly has become one of the better-known exchanges for trading Bitcoin, Ethereum, Litecoin and other so-called non-fiat currencies that aren’t tied to a specific currency by a specific country’s government, like the U.S. dollar. The exchange has more than 43 million verified users in more than 100 countries.
Coinbase has raised some $537.4 million from early stage private investors, according to Crunchbase. Its last round, which raised $300 million in 2018, valued Coinbase at $8 billion. Investors include Andreessen Horowitz, Tiger Global, IVP and Ribbit Capital.
Direct listings, which are different from traditional IPOs, aim to level the playing field for investors and give companies another path to going public. In December, the SEC approved a rule change from the New York Stock Exchange to allow direct floor listings.
Companies that use direct floor listings sell new shares and raise fresh capital in a single large transaction directly on the exchange without underwriters. Underwriters, typically large financial institutions such as banks and investment houses, are involved in traditional IPOs as guarantors who accept financial risk for liability in case of damage or financial loss.
Coinbase is the latest company to opt for a direct listing instead of a traditional IPO. Roblox, the gaming platform, said earlier this month it would use a direct listing to go public. Palantir Technologies (PLTR) - Get Palantir Technologies Inc. Class A Report and Asana (ASAN) - Get Asana Inc. Class A Report both used the method to go public last fall.
Slack Technologies (WORK) - Get Slack Technologies, Inc. Class A Report went public using a direct listing in April 2019, while Spotify Technology (SPOT) - Get Spotify Technology S.A. Report also took the direct IPO route in 2018.