On Friday, Coinbase circulated an S-1 filing ahead of its direct listing. Experts expected the public debut of Coinbase due to the recent surge in Bitcoin and cryptocurrency demand. The company also has strong political connections. The political terms of Coinbase also became controversial recently. Recent demand at private exchanges made the company more popular.
Coinbase Unexpected Growth in the year 2020
Financially, Coinbase saw an exponential surge in its revenue and earnings during 2020. The company’s performance was below par in 2019. It lost a total of $30.4 million during the year 2019, whereas its revenue was $533.7 million.
In 2020, the company saw a total income of $127.5 million with a revenue of $1.28 billion. There was total growth of 139% in 2020 compared to 2019. It is a big achievement for Coinbase. Due to the year 2020 mindblowing financial numbers, investors valued the company around $100 billion.
There is a big fluctuation in Coinbase revenue if we talk about the quarterly results. In Q1, company recorded $190.6 million revenue that is around $4 million higher than its revenue of $186.4 million in Q2 of 2020. Revenue accelerated in Q3 of 2020. The company collected total revenue of $315.4 million in the third quarter.
Quarter 4 of 2020 brought exponential growth for the company. It got a total revenue of $585.1 million in the last quarter of 2020. It helped Coinbase to go with a direct listing.
A direct listing is quite different from Initial Public Offering(IPO). It is also known as Direct Placement or Direct Public Offering. In this type of listing, a company can go public without raising capital. It has no lockup period. The Company can also access its liquidity. This process helps the company to cut costs of going public like removing the intermediary firm.
More Details about Coinbase Growth
The Fourth-quarter of 2020 totally changed the faith in Coinbase. It collected an operating income of $226 million in Q4, whereas it had a net income of $176.8 million. These numbers helped the company to establish a good reputation in the market.
Coinbase, a cryptocurrency exchange platform, gets maximum revenue from transactions by its users. It also earns revenue from its “Subscription and Services” revenue category that helped it to earn $20.7 million in Q4 of 2020.
All these activities helped Coinbase to become one of the fastest-growing, profitable unicorns. The company looks ready for direct offering.
As per Bloomberg data, 85% of the total 130 firms that went public last year, are unprofitable. Investors may get a good return on their investments due to the immense popularity of cryptocurrencies.
Coinbase has a huge user base of 43 million verified users. Transaction fee contributes 96% to the total revenue of the company. It helped the company to earn total revenue of $3.4 billion until 2020.
