Circle Internet Group, Inc. · NYSE:CRCL
Circle Internet — Circle Internet Financial — SPAC Merger (June 2021)
46 slides from Circle Internet's SPAC merger presentation, June 2021
Slide 1: Circle Internet Financial Limited
Circle Internet Financial Limited 2021 Circle Internet Financial | Investor Presentation, June 2021 | 1
Slide 2: Disclaimer
Disclaimer General This presentation is for informational purposes only to assist interested parties in making their own evaluation with respect to the proposed business combination between Concord Acquisition Corp (“Concord”) and Circle Internet Financial Limited (“Circle”). The information contain
Slide 3: Transaction leadership: Circle and Concord executives and directors
Jeremy Allaire Bob Diamond Chief Executive Officer Chairman Jeremy Fox-Geen Jeff Tuder Chief Financial Officer Chief Executive Officer Peter Ort Independent Director Circle Internet Financial | Investor Presentation, June 2021 | 3
Slide 4: Concord's team experience
Differentiated and diverse global operating and investment experiences EXTENSIVE OPERATING & INVESTING Deep domain expertise with financial services and financial technology EXPERIENCE Thorough understanding of the union between legacy financials and tech DEEP EXPERIENCE & Strong relationships with lead
Slide 5: Transaction Summary
Transaction Summary KEY HIGHLIGHTS IMPLIED SOURCES & USES ($ in mm) Pro forma enterprise value of $4.5bn, which equates to 5.8x 2023E Sources Valuation revenue of $778mm Circle Rollover Equity (2) $4,826 Capital Structure $969mm of cash held on the pro forma balance sheet SPAC Cash in Trust (3) $276
Slide 6: Our Mission
Our Mission “Raising global economic prosperity through the frictionless exchange of financial value.” The first digital currency native commercial Circle’s marquee accounts & partnerships financial institution built on public blockchain ecosystems and decentralized finance ~$190BN ~$885MN USDC in Circu
Slide 7: Circle's management team has broad and deep experience
Circle’s management team has broad and deep experience across digital currency, internet tech, fintech and financial services Jeremy Allaire Jeremy Fox-Geen Elisabeth Carpenter Li Fan Co-Founder & CEO Chief Financial Officer Chief Operating Officer Chief Technology Officer Mandeep Walia Dante Disparte Fla
Slide 8: The Circle Opportunity
The Circle Opportunity
Slide 9: Imagine a world where…
Imagine a world where… The financial system is radically more open, connected & interoperable Payments are frictionless, immediate & nearly free Borrowing & lending decisions are embedded in autonomous software, not humans Capital markets are as global & diversified as other Internet marketplaces Circ
Slide 10: The Dawn of the Internet of Value
The Dawn of the Internet of Value Each of these world-changing technologies began as a point solution and evolved into foundational layer in the overall stack. FINANCIAL VALUE EXCHANGE Crypto and blockchain is doing for the global exchange of value Satoshi WP Public debut what the internet did for t
Slide 11: The Future of Financial Infrastructure
The Future of Financial Infrastructure Re-building the the world’s economic infrastructure from the ground up, as internet-native technology. Perceived “Next-Gen” FinTechs Blockchain Finance Modern UX, but inefficient closed Blockchain-based infrastructure systems built on legacy rails built on open n
Slide 12: Foundation for Next-Gen Financial Services
Foundation for Next-Gen Financial Services Commoditization of Payments & Value Storage Financial Inclusion Near instantaneous and low-cost Provides support for the global settlement for any form of underbanked, access to payment and value exchange decentralized finance markets and a means of low-cost
Slide 13: Enter Stablecoins
Enter Stablecoins The global financial system meets Internet-native currency — Circle created & principally operates USD Coin. USDC is USDC is not A digital currency representation of Displacing existing central bank money an existing dollar that is redeemable 1:1 — fully reserved & audited Subject t
Slide 14: Leading the Market in Growth & Adoption
Leading the Market in Growth & Adoption USDC MARKET CAP GROWTH HISTORICAL ON-CHAIN TRANSACTION VOLUME Circle Internet Financial | Investor Presentation, June 2021 | 14
Slide 15: Building a Global Internet-Native Settlement Infrastructure
Circle is Organically Building a Global Internet-Native Settlement Infrastructure Exchanges connect to USDC rails Circle customers are covering 180+ countries already highly global 50% based Users can route USDC in the US through these markets and into and out of these currencies at the speed of the
Slide 16: A massive market opportunity expected to play out over decades
A massive market opportunity expected to play out over decades Blockchain tech and M2 MONEY SUPPLY1 GLOBAL PAYMENTS2 Long-term crypto assets are forming the basis for a new global $130tn $35tn addressable markets financial infrastructure CRYPTOCURRENCY3 $2tn 1 Source: The World Bank as of 2019 2 Sour
Slide 17: The Circle Platform
The Circle Platform
Slide 18: Circle operates a suite of internet native financial services
Circle operates a suite of internet native financial services USDC Transaction & Treasury Services (TTS) SeedInvest (interest income on reserves) (transaction & usage fees, spread capture) (fee-based) Circle operates the core market Circle Accounts & API services Two-sided marketplace for infrastruc
Slide 19: Circle Account provides a foundation for using USDC
Circle Account provides a foundation for using USDC & Digital Currency Free Circle Account is entry point for Circle API Services Yield Services Convert, Mint, Redeem USDC USDC Storage & Custody1 Seamlessly embed Earn interest on USDC Circle payments, payouts lent into collateralized Send & Receive
Slide 20: API Services
API Services Circle API Services comprise a powerful suite of infrastructure for diverse digital currency payments and treasury use cases ACCOUNTS API Securely store and manage digital currency incl. USDC, BTC & ETH Manage complex funds flows and embedded finance applications PAYMENTS API Accept payme
Slide 21: Accelerating Use Cases
Accelerating Use Cases Visa has integrated USDC into One of the world’s fastest growing Dapper uses Circle infrastructure VisaNet as a currency and settlement crypto exchanges adopted Circle and USDC settlement for global infrastructure, enabling Visa digital APIs and new Card and ACH payments suppo
Slide 22: Yield Services
Yield Services CORE PRODUCT OFFERING POWERFUL BENEFITS TO CUSTOMERS Implementation of professionally ● High-Yield USDC services bundled Holding assets in USDC allows users to managed fixed-rate asset allocation with Circle Accounts and in Circle in the crypto market: move in and out of crypto investm
Slide 23: SeedInvest: Transformation of the private capital markets ecosystem
SeedInvest: Transformation of the private capital markets ecosystem SeedInvest is a leading equity crowdfunding platform, opening up $300M+ 500k+ 235+ Total raised Unique investors Successful Offerings startup investing to everyone A two-sided marketplace for investing in private companies on the int
Slide 24: SeedInvest: Evolving into a platform for tokenization
SeedInvest: Evolving into a platform for tokenization of private capital markets SeedInvest today (2021) Tokenization of Capital Markets Tokenization of Securities ✓ Flexible platform enabling a ✓ The tokenization of capital markets wide range of capital GLOBAL DEBT & EQUITY1 has the potential to en
Slide 25: The Circle Platform is difficult to replicate
The Circle Platform is difficult to replicate in an already disruptive ecosystem Seamless integrations 7 years of crypto-aware across existing banking & KYC/AML compliance payments networks programs Broad array Trusted pioneer of capabilities with years of deep from years of tech domain expertise in
Slide 26: Financial Opportunity
Financial Opportunity
Slide 27: Fundamentals of Our Financial Model
Fundamentals of Our Financial Model USDC ADOPTION DRIVES DEMOCRATIZATION CIRCLE GROWTH AND REVENUE OF CAPITAL MARKETS USDC Reserve Transaction & Treasury Services SeedInvest Growing market adoption, Increasing use of digital Growth in direct to internet increasing reserve balances, currency for paym
Slide 28: Significant Opportunity…
Significant Opportunity… CIRCLE ACCOUNTS TOTAL REVENUE AND USDC INTEREST INCOME ($ in millions) 1 CAGR: CAGR: 229% 177% Circle Internet Financial | Investor Presentation, June 2021 | 28 1 USDC Income Sharing and Transaction Costs refers to USDC interest income paid to third party issuers of USDC as
Slide 29: …with Growing Operating Leverage
…with Growing Operating Leverage Target Long Term Adjusted EBITDA Margin1 35%+ ADJUSTED EBITDA ($ in millions) Significant investment drives revenue and customer scale with high-leverage unit economics, designed to deliver accelerating profitability over time Note: Adjusted EBITDA and Adjusted EBITDA
Slide 30: Substantial Investment to Achieve Substantial Results
Substantial Investment to Achieve Substantial Results Product & Significant expansion of Product and Engineering teams Technology Technology investment to support global scaling, new product development and core infrastructure innovation in crypto-economic systems Sales, Marketing & Dramatic growth a
Slide 31: Investment Highlights
Investment Highlights Beginning stages of digital currency and blockchains redefining money, payments and financial services delivery Blockchain-Based Payments & Treasury Massive network effects enable accelerating adoption Infrastructure We operate one of the fastest growing dollar digital currencies
Slide 32: Valuation Perspectives
Valuation Perspectives
Slide 33: Approach to Comparable Companies
Approach to Comparable Companies Payments Networks • Critical global financial infrastructure • Volume-based take-rate model • Global connectivity with network effects Circle advantage: digital-asset macro tailwinds with deep treasury and payments integration High Growth Payments & Financial Software
Slide 34: Operational Benchmarking
Operational Benchmarking 2021E – 2023E REVENUE GROWTH CAGR 2023E ADJUSTED EBITDA MARGIN2 Payment Networks High Growth Payments & Financial Software Digital-Asset Focused Payment Networks High Growth Payments & Financial Software Digital-Asset Focused Target Long Term Adjusted EBITDA Margin3 35%+ NM
Slide 35: Peer Valuation Benchmarking
Peer Valuation Benchmarking Enterprise Value / 2023E Revenue Growth Adjusted Enterprise Value / 2023E Revenue Payment Networks High Growth Payments & Financial Software Digital-Asset Focused Payment Networks High Growth Payments & Financial Software Digital-Asset Focused (1) (2) (3) (1) (2) (3) Sour
Slide 36: Appendix
Appendix
Slide 37: Projected P&L Summary
Projected P&L Summary $ in millions 2021E 2022E 2023E USDC 40 111 196 TTS 65 267 622 SeedInvest 10 29 68 Total Revenue and USDC Interest Income 115 407 886 % Growth 253% 118% USDC Income Sharing and Transaction Costs 19 56 108 TTS Transaction Costs 33 94 166 Total Third-Party Transaction Costs 52 15
Slide 38: Substantial Projected Revenue Growth
Substantial Projected Revenue Growth USDC INTEREST INCOME TTS REVENUE SEEDINVEST REVENUE ($ in millions) ($ in millions) ($ in millions) 1 CAGR: CAGR: CAGR: 121% 209% 161% 1 USDC Income Sharing and Transaction Costs refers to USDC interest income paid to third party issuers of USDC as well as networ
Slide 39: Non Financial Performance Indicators
Non Financial Performance Indicators USDC IN CIRCULATION TOTAL FIAT TRANSACTION VOLUME1 ($ in billions) ($ in billions) CAGR: CAGR: 136% 155% TOTAL VOLUME LENT SEEDINVEST END OF PERIOD BALANCES TOTAL CLOSED VOLUME ($ in billions) ($ in millions) CAGR: CAGR: 554% 124% Circle Internet Financial | Inve
Slide 40: 2021 Q1 Results and Q2-Q4 Forecast
2021 Q1 Results and Q2-Q4 Forecast CIRCLE ACCOUNTS TOTAL REVENUE AND USDC INTEREST INCOME ($ in millions) 1 1 USDC Income Sharing and Transaction Costs refers to USDC interest income paid to third party issuers of USDC as well as network fees associated with processing USDC transactions Circle Inter
Slide 41: USDC Interest Income is sensitive to rising interest rates
USDC Interest Income is sensitive to rising interest rates $ in millions Incremental USDC Interest Income1 Change in interest rates 2022 2023 (instantaneous parallel shift) Base Case - - +50bps $235 $555 +100bps $470 $1,110 +150bps $705 $1,665 +200bps $940 $2,220 1 Incremental USDC Interest Income t
Slide 42: Share Count Summary
Share Count Summary BASIC CASE Pro Forma Ownership Shares Ownership % SPAC 35.3 6.3 % Public Class A Shares 27.6 4.9 % Private Class A Shares 0.8 0.1 % Private Class B Shares 6.9 1.2 % PIPE 41.5 7.4 % Circle Equity 482.6 86.3 % Fully Diluted Shares Outstanding 559.3 100.0 % BASIC + WARRANTS + EARNOU
Slide 43: Appendix II - Risk Factors
Appendix II - Risk Factors
Slide 44: Risk Factors (1/3)
Risk Factors (1/3) Risks Related to Circle’s Business and Industry ● We have a limited operating history in an evolving industry, which makes it difficult to evaluate our future prospects and may increase the risk that we will not be successful. ● We have experienced rapid growth recently, and if we d
Slide 45: Risk Factors (2/3)
Risk Factors (2/3) Risks Related to Circle’s Business and Industry (continued) ● We are in the process of establishing relationships with decentralized finance protocols to offer our users access to such decentralized protocols. Such relationships create certain liability risk for Circle should our cu
Slide 46: Risk Factors (3/3)
Risk Factors (3/3) Risks Related to SeedInvest ● If SeedInvest is not able to expand to add additional assets such as tokenized securities in a regulatory compliant way or to continue to attract high-quality companies for its investment platform, it may be unable to attract or retain customers and i