Bitcoin rewards company Fold applies for a Nasdaq listing, supported by only 22 employees behind a valuation of $365 million
Fold's initial public offering (IPO) application is awaiting a response from the SEC.Author: Weilin, PANews
Fold is a company focused on Bitcoin financial services. On October 8, this 10-year-old crypto company submitted an S-4 application to the U.S. Securities and Exchange Commission (SEC), preparing to go public on NASDAQ through a Special Purpose Acquisition Company (SPAC).
Fold allows users to earn Bitcoin cashback on everyday shopping at retailers like Amazon, Uber, and Starbucks. It also offers a debit card that enables users to buy or sell Bitcoin directly through their accounts, as well as send Bitcoin, providing cryptocurrency cashback rewards in the process. Fold is integrated with the Bitcoin Lightning Network, allowing users to earn Bitcoin by paying mortgages and rent.
Based on this product positioning, Fold is also one of the competitors of digital payment giant Block's Cash App. Fold stated that it will continue to accumulate Bitcoin in the short term as part of its Bitcoin treasury investment strategy. As of July 31, the company reported holding approximately 1,002 BTC (worth $63.2 million) in its investment treasury.
Valuation of $365 million, only 22 employees
On October 8, Fold submitted the S-4 document to the SEC, following the company's announcement in July of its agreement to go public through a merger with the NASDAQ-listed SPAC FTAC Emerald Acquisition Corp. The proposed transaction values Fold at $365 million. According to the document, FLD will become the company's NASDAQ stock code.
The annual operating performance as of December 31, 2023, shows that Fold's net income was $21.53 million, down about 25% from $28.88 million in 2022. The unaudited operating performance as of June 30, 2024, shows that Fold's net income for the first six months was $10.07 million, a decrease of about 7% compared to $10.83 million in the same period of 2023.
Currently, Fold's initial public offering (IPO) application is awaiting a response from the SEC. Fold's CEO Will Reeves emphasized that the IPO will provide much-needed funding to expand services and improve technological infrastructure. Fold plans to raise funds through the listing to enhance user experience, develop new products, and expand market coverage.
Having been established for 10 years, Fold had only 22 full-time employees as of March. Its growth has gone through three phases. Initially, Fold was a platform that helped users exchange unwanted gift cards for Bitcoin. Subsequently, the company began allowing users to purchase gift cards with Bitcoin, facilitating transactions in everyday spending locations like Starbucks and supermarkets. In the second phase, Reeves and co-founder Matt Luongo shifted direction, allowing users to buy gift cards with fiat currency while earning Bitcoin rewards in the process.
"We evolved because we saw a bigger problem: there aren't enough people who own Bitcoin, and there aren't enough good ways to earn Bitcoin," Reeves explained in a recent interview. "That's why we are very focused on rewards—giving everyone a way to earn Bitcoin passively without taking on too much risk or requiring too much educational cost."
Fold's rewards model has attracted many users looking to acquire Bitcoin in a non-direct investment manner. Reeves emphasized the importance of timing, stating that the company has been very successful in seizing product opportunities. By offering products with Bitcoin rewards, Fold allows users to accumulate sats passively rather than relying on traditional cashback, creating an initial experience with Bitcoin for users.
As Fold identifies its core user base and optimizes the sats cashback experience, the company has expanded its product range, adding other Bitcoin services such as buying and selling Bitcoin within the app and paying bills, allowing users to earn sats cashback simultaneously. In the future, Fold plans to launch credit cards and more financial services.
"Listing whales" or increasing staff, will push for international services
If successful in going public, Fold will join the ranks of listed whales holding Bitcoin on their balance sheets. The most notable among them is MicroStrategy, which held 252,220 Bitcoins as of September, valued at approximately $15 billion at today's prices. Recently, MicroStrategy CEO Michael Saylor updated the company’s plan to offer $700 million in convertible preferred notes. Additionally, Block holds 8,211 Bitcoins, worth over $630 million.
This year, optimism surrounding spot Bitcoin ETFs, Bitcoin halving, and various drivers related to the U.S. presidential election have led the market to generally predict that these factors will continue to push Bitcoin prices higher in 2024, with some crypto users believing Bitcoin will approach the $100,000 mark. This optimism has also boosted the stock prices of companies holding Bitcoin. For example, Bitcoin has risen about 49% year-to-date, while MicroStrategy's stock has increased nearly 165% during the same period.
Fold CEO Will Reeves hopes to make Fold the Bitcoin bank for users. Although this idea may seem somewhat counterintuitive to hardcore Bitcoin supporters who believe Bitcoin is meant to replace banks, Reeves believes it is more pragmatic. He believes Fold will become a bridge connecting the world of Bitcoin with traditional banking and the new world of Bitcoin Layer 2.
Currently, Fold utilizes the Lightning Network, aiming to provide faster and cheaper payment services for users who use Bitcoin as peer-to-peer cash. Reeves stated that Fold also has applications for technologies like Liquid, roll-ups, BitVM, and Ark.
As of July 2024, the Fold platform has over 575,000 customer accounts that have earned Bitcoin rewards. Among these, over 65,000 are verified accounts and/or Bitcoin trading customers. Of these accounts and/or Bitcoin trading customers, approximately 10,000 are considered advanced users.
Currently, Fold only serves U.S. residents. Reeves revealed that Fold is about to launch more international products, although these products may not appear under the Fold brand.
At present, Fold's IPO plan positions it as a potential bridge between traditional finance and the cryptocurrency world, attracting more users to join this rapidly evolving field. As the market continues to focus on Bitcoin, Fold's successful listing may inspire more fintech companies to explore further possibilities with digital currencies, and PANews will closely monitor the subsequent developments.
