Figure Technologies, a stablecoin issuer, made its initial public offering on the Nasdaq today, trading under the ticker FIGR. The company successfully raised over $780 million, with early indications suggesting it will open at around $34 per share, exceeding expectations and generating significant enthusiasm among investors.
In an interview with Yahoo Finance Executive Editor Brian Sozzi, Mike Cagney, co-founder and executive chairman of Figure Technologies, highlighted the company’s innovative use of blockchain technology to disrupt traditional capital markets. Cagney emphasized their accomplishments in the credit domain, noting that Figure has facilitated over $17 billion in originations on public blockchain, alongside more than $55 billion in transactions. The company’s financial performance has also been strong, reporting $340 million in revenue and achieving gap profitability, which he attributes to a favorable market response.
Discussing the complexities of their business model, Cagney explained that blockchain eliminates the need for multiple intermediaries in transactions. For instance, traditional stock trading can involve as many as seven parties, while blockchain can reduce this to just two, thereby unlocking significant capital efficiency. This level of disintermediation is not only pivotal for transforming current markets but also for creating new ones, such as a liquid private credit marketplace that didn’t previously exist.
With the significant funds raised, Cagney indicated that Figure would leverage its balance sheet to advance its blockchain initiatives, taking calculated risks that competitors may find challenging. He expressed optimism about the evolving regulatory landscape for stablecoins, particularly citing the benefits of the “Genius Act,” which is expected to enhance opportunities in decentralized finance (DeFi). He sees a bright future for this sector, especially as capital flows shift towards Treasuries.
Cagney also addressed their underwriting process, clarifying that while Figure employs artificial intelligence, the approach remains straightforward by minimizing human involvement. The company collaborates with over 170 third parties, utilizing a consistent methodology for asset origination on-chain, facilitating liquidity in previously stagnant markets.
When asked about the housing market, Cagney noted some encouraging trends, including falling interest rates, which could stimulate lending activity. However, he remains cautious about predicting a return to the low mortgage rates seen during the COVID pandemic. Despite this uncertainty, he anticipates growth in the first lien mortgage sector, particularly as rates decline further.
Cagney is optimistic about the potential for profitability in the coming year, spurred by macroeconomic factors and the expansion of blockchain applications beyond private credit. He envisions broadening their influence into equities, commodities, and currencies, fostering innovative use cases within these asset classes.
Reflecting on the state of the stock market, Cagney indicated that traditional systems may soon be outdated, given the rapid advancements being made with blockchain. He foresees a pivotal shift in public market capitalization towards blockchain technologies.
Driven by a commitment to enhancing capital allocation, Cagney has dedicated his career to connecting sources of capital with opportunities. He expressed his excitement about Figure’s mission to democratize lending decisions through blockchain and decentralized finance, particularly as more capital flows into Treasuries.
As the IPO marks a significant milestone for Figure Technologies, Cagney’s vision and enthusiasm set the stage for what he believes will be a transformative journey for the company and the broader financial landscape.
