Tether Holdings SA, the issuer of the world’s largest stablecoin, is actively seeking to raise between $15 billion and $20 billion through a private placement that could significantly elevate its valuation to around $500 billion. This move would position the El Salvador-based company among the most valuable private entities globally, alongside high-profile companies like OpenAI and Elon Musk’s SpaceX.
Sources familiar with the negotiations revealed that Tether is vying for approximately a 3% equity stake in exchange for the investment. However, these figures are preliminary and subject to change, with some cautions indicating that the final amount might fall short of the targeted range. The discussions are still in their initial phases, and interested investors have begun to access a data room to evaluate whether they wish to partake in the potential funding round, which is expected to conclude by the year’s end.
Cantor Fitzgerald has been appointed as the lead adviser for this fundraising effort. Paolo Ardoino, Tether’s CEO, outlined the company’s strategy of expanding across various sectors, including stablecoins, artificial intelligence, commodity trading, energy, communications, and media. He expressed the company’s intent to maximize its scale and noted that the potential investment would be aimed at evolving Tether’s business model.
Tether’s USDT token, which is pegged to the US dollar, currently has a market valuation of $172 billion, making it the largest stablecoin on the market. In comparison, its nearest competitor, Circle Internet Group, ranks second with a USDC stablecoin valued at about $74 billion. Tether has been exceptionally profitable, earning $4.9 billion in profit during the second quarter alone, largely due to its investment strategy that includes cash-like assets and US Treasuries.
The company is making strides to re-enter the US market, especially in light of supportive policies from the previous administration. Recently, Tether has announced plans for a US-regulated stablecoin and appointed Bo Hines, a former White House official, to lead this initiative. The company aims to navigate the regulatory landscape following past encounters with US regulators, which included a $41 million settlement in 2021 concerning allegations regarding misrepresentation of reserves.
Overall, Tether’s ambitious fundraising efforts indicate its desire for sustained growth and relevance within the evolving cryptocurrency landscape, as it prepares to extend its influence and adapt to changing market conditions.
