Blockchain startup Figure is reportedly partnering with financial giants Goldman Sachs, JP Morgan, and Jeffries to explore the possibility of an initial public offering (IPO) for its lending arm in 2024. This collaboration follows the successful collaboration between Figure and the three institutions on the issuance of an asset-backed security (ABS) in April. The company aims to achieve a valuation of $2-3 billion through this IPO.
Founded by SoFi founder Mike Cagney, Figure has established itself as a leading provider of institutional blockchain solutions. The company’s proprietary blockchain platform, Provenance, serves as the foundation for its ABS issuance and mortgage registry. Additionally, Figure holds an Alternative Trading System (ATS) license that enables it to trade funds, equity, and other securities. The company is also actively engaged in tokenization solutions with asset manager Apollo Global in association with JP Morgan and serves as a technology provider for the USDF Consortium in tokenized deposits.
While Figure’s lending arm, specifically its retail real estate financing platform, has been successful in providing Home Equity Lines of Credit (HELOC) worth $8 billion thus far, the company’s primary objective is not to operate a retail lending business. Instead, Figure aspires to be an infrastructure provider within the blockchain space. However, to gain acceptance and prove the value of blockchain in the financial sector, Figure initially needed to demonstrate substantial cost savings, which it successfully accomplished through its lending arm.
As banks have become more receptive to adopting blockchain technology, Figure’s CEO Mike Cagney is now considering an IPO and potentially appointing a new leader for the publicly listed firm. The changing landscape of the banking sector, which increasingly recognizes the potential of blockchain for securitization and other financial operations, has prompted Figure to explore new avenues for growth.
In recent months, Figure has undergone strategic changes in preparation for a potential IPO. In July, the company laid off 20% of its staff, signaling its dedication to streamlining operations and optimizing resources. Furthermore, Figure’s initial plans to acquire a bank through a Special Purpose Acquisition Company (SPAC) were abandoned in late 2022, and it refunded the raised funds of over $400 million. The company also decided against pursuing a banking license due to regulatory challenges. Instead, focusing on digital asset management has emerged as Figure’s current area of strength.
Overall, Figure’s collaboration with major financial institutions for a potential IPO highlights the increasing acceptance of blockchain technology within the banking industry. As the financial landscape continues to evolve, Figure’s role as an infrastructure provider and its commitment to leveraging blockchain for greater efficiency position it as a significant player in the future of finance.
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FAQ
Q: What is Figure?
A: Figure is a blockchain startup that provides institutional solutions and services, leveraging its proprietary blockchain platform called Provenance.
Q: What financial institutions is Figure collaborating with?
A: Figure is collaborating with Goldman Sachs, JP Morgan, and Jeffries for a potential IPO of its lending arm.
Q: What is the valuation Figure is aiming for in the IPO?
A: The company aims to achieve a valuation of $2-3 billion.
Q: What are Figure’s main offerings?
A: Figure’s main offerings include a retail real estate financing platform, specifically Home Equity Lines of Credit (HELOC), and digital asset management solutions.
Q: Why did Figure start its lending arm?
A: Figure started its lending arm because banks were initially reluctant to adopt blockchain technology, and Figure wanted to demonstrate the cost-saving potential of blockchain in lending operations.
Q: What changes has Figure made recently?
A: Figure has laid off 20% of its staff, shifted its focus away from acquiring a bank through a SPAC, and abandoned plans to obtain a banking license. Instead, the company is currently thriving in the field of digital asset management.