According to sources familiar with the matter, American cryptocurrency exchange Coinbase will use Goldman Sachs to handle its upcoming initial public offering.
A report from Business Insider has quoted two sources that claim that Coinbase will use the services of investment banking firm Goldman Sachs for its IPO. As reported by The Daily Chain earlier this week, Coinbase officially announced that it had filed the necessary documentation for an IPO with the US Securities and Exchange Commission.
The company announced its intention to go public on Twitter and on its blog earlier this week with a short excerpt indicating that it had ‘confidentially submitted a draft registration statement’ with the US Securities and Exchange Commission.
Coinbase has links with Goldman Sachs through one of its board members, Fred Ehrsam, who previously worked at the firm as a trader from 2010 to 2012. He went on to co-found Coinbase alongside CEO Brian Armstrong.
Analysts predict big numbers
While details of the planned IPO are still to be revealed to the general public, cryptocurrency analysts are touting some serious numbers for America’s biggest exchange.
Morgan Creek Digital co-founder Anthony Pompliano highlighted the story in his daily newsletter to investors at the end of the week. While admitting that analysts are still waiting for the S-1 documentation to be made available to really grasp the ins and outs of the IPO, ‘Pomp’ delivered some seriously optimistic predictions for the public offering.
Firstly, Coinbase has raised more than $500 million in funding since its inception, with its last round of funding raking in around $300mln. The company currently has a valuation of around $8bln, serves over 35 million registered users and has around $25 bln in assets under custody.
“It is hard to see a world where Coinbase is not doing at least $500 million in annual revenue on the low end and $3-5 billion on the high end. With these types of numbers, don’t be surprised if the company is able to price the IPO between $20 billion and $30 billion. Once it is in the public market, retail investors seeking crypto exposure are likely to bid the price up even higher,” Pompliano wrote in his newsletter.
He added that the market conditions could not be more supportive of the move by Coinbase. This is due to the fact that Bitcoin is trading at an all-time high, which is driving interest from prospective investors.
Cryptocurrency analytics firm Messari also offered a similar prediction for the potential valuation of the IPO, arriving at an estimated $28bln valuation of the IPO.