Coinbase Chooses Direct Listing Route to Public Markets

Digital currency wallet service Coinbase said in a blog post Thursday that it plans to join the public markets by way of a direct listing.

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In December, the company shared that it confidentially filed an S-1 with the U.S. Securities and Exchange Commission. The S-1 has not been made public as of yet.

Coinbase, headquartered in San Francisco, was founded in 2012 and enables traders to buy and sell bitcoin. Bitcoin is currently trading at just under $33,000 after reaching an all-time high earlier in January.

Direct listings have become an increasingly popular way for a company to join the public markets because it gives companies that want to trade their stock on a public exchange a way to get there without the extra money and hassle of a traditional IPO.

A company doing a direct listing starts trading without a block of shares being sold, and therefore without new capital being raised. A direct listing gives founders, vested employee shareholders and prior investors a path to liquidity.

Adding to the hassle-free process of direct listings is recent news that the SEC approved the New York Stock Exchange’s proposal to allow companies to raise capital in a direct listing.

Within the past year, we have seen companies, such as project management startup Asana, big data analytics company Palantir Technologies and online game platform Roblox choose the direct listing route.

Coinbase has raised $547.3 million in known venture-backed funding since the company was founded in 2012 by Brian Armstrong and Fred Ehrsam, according to Crunchbase data. The company hasn’t announced new VC investment since 2018, when it closed a $300 million Series E round of funding led by Tiger Global Management.

Illustration: Dom Guzman