The cryptocurrency sector attracts capital again: Figure's debut on the US stock market surged 24%, with a market value exceeding 6 billion USD

The listing frenzy in the cryptocurrency sector sparked by "the first stock of stablecoins," Circle, continues to surge, with another new player labeled as a cryptocurrency rising sharply on its debut day on the U.S. stock market.

On Thursday, November 11, Eastern Time, the blockchain-based consumer lending platform Figure Technology Solutions Inc. debuted on NASDAQ under the stock trading code FIGR, opening at $36, a 44% increase from the IPO price. Shortly thereafter, the increase expanded to over 50%, peaking at more than 52%, before gradually giving back about half of the gains, closing at $31.11, up 24.4%.

Figure's issuance price was $25, which is 13.6% to 20% higher than the latest adjusted guidance range of $20 to $22. The company successfully raised $787.5 million by issuing 31.5 million shares.

Based on the issuance price, Figure's valuation after listing was $5.3 billion, which reached $7.6 billion at the opening price, and by the close, the company's market capitalization was approximately $6.57 billion. This valuation far exceeds the company's $3.2 billion valuation during its 2021 venture capital round.

Figure's listing marks the continuation of the trend of cryptocurrency companies embracing the public market. This week is seen as the busiest week for IPO transactions in the U.S. this year. Following Figure, the well-known cryptocurrency exchange Gemini Space Station Inc., led by billionaires Cameron and Tyler Winklevoss, is set to list on NASDAQ on Friday.

The strong performance of Figure's stock reflects investors' ongoing interest in fundamentally solid blockchain companies, which have achieved profitability and applied blockchain technology in practical businesses such as home equity loans.

Blockchain Lending Platform with Steady Profitability Improvement

Figure was founded in 2018 by former SoFi Technologies CEO Mike Cagney. The company develops blockchain technology to facilitate lending operations, including home equity lines of credit, and has funded over $16 billion in loans on the blockchain.

Documents submitted to regulators show that Figure's financial performance is robust, turning a profit in the first half of this year, with revenue increasing by 22% year-on-year.

In the six months ending June 30, Figure achieved a net profit of $29.1 million and revenue of $190.6 million, compared to a net loss of $15.6 million and revenue of $156 million in the same period last year. For the full year of 2024, the company expects revenue of $341 million and a net profit of $17.2 million, a significant improvement compared to the full year of 2023, which had revenue of $209.6 million and a net loss of $47.94 million.

In the 12 months ending June 30, Figure facilitated approximately $6 billion in home equity loans, a year-on-year increase of 29%. The company has a high-quality customer base, with the weighted average FICO credit score of HELOC loan customers from partner brands at 756, while Figure brand loan customers have a score of 749

Management Emphasizes the Practical Value of Blockchain Technology

Figure's CEO Michael Tannenbaum stated that the company's listing is closely related to blockchain technology. He said:

"What makes Figure unique is that we are a company that adds real value through blockchain in the real world."

Figure's co-founder Mike Cagney mentioned in the prospectus that Figure is the largest player in the public blockchain space for real assets, and currently, no other peers can surpass it. He told the media this Thursday, "Blockchain is the democratization of financial services."

Cagney told another media outlet that Figure will leverage blockchain to transform investments. He cited an example where there are seven intermediaries involved in stock market transactions between buyers and sellers, while blockchain technology can simplify the participants to just two parties.

Cagney also revealed that among the top 20 mortgage companies, 10 are using Figure's technology to issue loans. David Chao, a general partner at early investor DCM Ventures, stated that more than 20 major banks are using the Provenance blockchain developed by Figure.

Regarding market prospects, Tannenbaum mentioned that there is $35 trillion in home equity in the United States, stating, "Our business area has enormous room for development and growth potential."

Crypto Companies Embrace Continued Trend of Going Public

Figure's successful IPO adds new momentum for blockchain and cryptocurrency-related companies to enter the public market. The company’s IPO saw strong demand, increasing the number of shares issued from the initial 26.65 million to 31.5 million, with the pricing range adjusted from $18-20 to $20-22.

Billionaire investor Stanley Druckenmiller's Duquesne Family Office LLC expressed interest in purchasing up to $50 million worth of shares at the IPO price. Goldman Sachs, Jefferies Financial Group, and Bank of America are serving as the lead underwriters for this IPO.

Figure's investors include DCM, Ribbit, Gemini Investments, and affiliates of Morgan Creek Capital Management. By holding Class B shares with 10 votes per share, Cagney expects to maintain control of 68.6% of the voting rights in Figure.

More IPO transactions are set to debut this Friday, including the highly anticipated cryptocurrency exchange Gemini, which earlier this week raised its price guidance range from $17 to $19 per share to $24 to $26 per share. Based on the new upper limit, its valuation could reach $3.1 billion.

Founded in 2014, Gemini has over $18 billion in assets on its platform, offering services such as cryptocurrency trading, USD stablecoins, digital asset custody, and cryptocurrency rewards credit cards