- Tether initiates discussions for $15–20B funding, aiming for a valuation of $500B with investment interest from SoftBank and Ark.
- Achieving a $500B valuation could position Tether among the largest private enterprises globally.
- Support from SoftBank and Ark may enhance Tether’s quest for mainstream acceptance.
Tether Holdings SA, the company behind the leading stablecoin globally, is reportedly exploring significant fundraising opportunities with prominent investors like SoftBank Group Corp. and Ark Investment Management LLC. This initiative could elevate Tether to one of the most valuable private corporations worldwide, as reported by Bloomberg.
The initiative is projected to value Tether at approximately $500 billion, as the firm seeks to raise between $15 billion and $20 billion in exchange for a 3% equity stake through private placement.
A Vision of a $500 Billion Valuation
Should this fundraising endeavor be successful, it would mark Tether’s most substantial move yet to attract external funding, potentially placing it alongside the world’s most valued private entities.
A valuation of $500 billion would outstrip a number of established blue-chip firms, reflecting Tether’s extensive token issuance and the impressive financial returns from its asset reserves.
Tether’s USDT stablecoin plays a pivotal role in the crypto landscape, facilitating value transfers across markets and offering a method for investors to operate beyond traditional banking frameworks. Backed by cash-equivalents, primarily US Treasuries, Tether has leveraged its assets to generate substantial interest income.
Leading Tether is Chief Executive Officer Paolo Ardoino with co-founder Giancarlo Devasini as chairman, who also holds the largest stake in the company. Bloomberg estimates that a $500 billion valuation could value Devasini’s shares at around $224 billion.
Strategic Investments from SoftBank and Ark
Japan-based SoftBank, under the leadership of founder Masayoshi Son, is known for its bold investments in technology across various sectors, including autonomous vehicles and AI.
An investment in Tether would align with SoftBank’s strategy of pursuing groundbreaking opportunities, exemplified by its planned $30 billion push towards OpenAI.
Ark Investment Management, helmed by Cathie Wood, has expressed significant interest in the digital asset sphere. The firm has also previously invested in Circle Internet Group Inc., which competes closely with Tether in the stablecoin market. Circle’s USD Coin (USDC) has a market cap around $74 billion, compared to Tether’s approximately $173.5 billion.
The potential collaboration with SoftBank and Ark could enhance Tether’s efforts to lay down roots in traditional finance while bolstering its legitimacy, especially within the US, where Tether has faced scrutiny regarding its involvement in questionable transactions.
Advisors and Potential Implications
Cantor Fitzgerald LP, an investment bank based in New York and led by current US Commerce Secretary Howard Lutnick, is advising Tether on this fundraising journey. The firm also provides custody services for Tether’s assets, underscoring its crucial role in the company’s financial strategy.
This funding effort emerges as stablecoins grow increasingly attractive to investors, regulators, and government entities. As US regulators prepare to implement stricter oversight on digital assets, partnering with high-profile financiers may position Tether advantageously in global markets.
If these discussions advance and funding materializes, Tether’s valuation would be a landmark achievement not only for the company but for the broader cryptocurrency sector, indicative of the ongoing integration of digital assets into traditional finance.
