A recent report by Tiger Research examines the reasons why Web3 companies are transitioning from token funding to IPOs. This change could significantly impact their growth strategies and the industry as a whole.
IPO Trend in Web3 Companies
Web3 companies like Circle are beginning to show interest in Initial Public Offerings (IPOs) as a means to secure more sustainable funding. Previously, they relied on token funding through ICOs and IDOs, but the volatility of token prices and regulatory uncertainty have exacerbated their situation. The shift to IPOs allows companies not only to secure longer-term investments but also to reduce legal risks.
Reasons for Choosing IPOs in Web3
Web3 companies opt for IPOs as a way to certify their regulatory compliance and build trust among institutional investors. IPOs serve as a kind of certification that verifies their market compliance. Successful IPO examples, like Coinbase, illustrate how adherence to regulatory standards can enhance investor trust and accelerate business growth. Additionally, IPOs provide access to a broader client base, including large institutional funds.
Future of IPOs in the Web3 Market
IPO activity among Web3 companies is expected to increase in the coming years. This trend is linked to the sector's integration into traditional financial markets and its successes in capital attraction through public offerings. Centralized exchanges, stablecoin issuers, and Web3 solution providers are becoming major candidates for IPOs, seeking to expand their positions in the global market.
The transition of Web3 companies to IPOs demonstrates significant changes in funding methods and the creation of trust with investors. While IPOs may not suit everyone, they provide a powerful tool for accessing capital markets and strengthening companies' competitive positions.
