Digital asset infrastructure company Blockstream has raised $125 million to expand its Bitcoin mining facilities amid strong demand for hosting.
The $125 million raise was financed by convertible note and a secured loan. Venture capital firm Kingsway Capital led the convertible note raise, with additional participation from Fulgur Ventures. Cohen & Cohen Capital Markets, part of J.V.B. Financial Group, advised Blockstream on the deal.
According to the press release, Blockstream will use the capital raised to expand its mining facilities "in order to meet the strong demand for its institutional hosting services," which they claim remains high "due to the company's strong track record and substantial scale, coupled with an industry-wide shortage of available power capacity."
This raise follows Blockstream's August 2021 raise of $210 million which valued the company at $3.2 billion. The company utilized the previous round to build several mining facilities with the capacity for institutional hosting customers, along with the strengthening of Blockstream's vertical integration for ASIC manufacturing.
"This fundraise allows us to accelerate the YoY revenue growth we created with our 2021 Series B and continue to build infrastructure for the future Bitcoin economy," Erik Svenson, Blockstream President and CFO, commented. "We remain focused on reducing risk for institutional Bitcoin miners and enabling enterprise users to build high-value use cases on the most secure, robust, and scalable blockchain in the world - Bitcoin."
Blockstream's new funding round didn't mention the valuation of the company. However, in Dec. 7 last year, Bloomberg reported the company is seeking to raise funds at a 70% lower valuation than in its previous round under $1 Billion.
Hosting is a service that data centers provide to crypto miners so customers can store their mining rigs and mine digital assets for a fee. The service has been a popular way for miners to earn bitcoin rewards without having to sink a large amount of capital into building out infrastructure, as crypto winter has weighed heavily on the industry and capital markets have been essentially inaccessible for many.
Blockstream was founded in 2014 with a focus on building infrastructure and applications based upon the Bitcoin Network. The firm was co-funded by CEO Adam Back (inventor of Hashcash, a system for discouraging spam emails that influenced Satoshi Nakamoto's proof-of-work consensus mechanism design for Bitcoin) and nine others, including Bitcoin Core developer Gregory Maxwell. The company has over 500 megawatts of power capacity underway for its mining services.
It is also the developer of decentralized market technology Liquid Network, which enables trustless Bitcoin swap settlements and helps financial institutions to tokenize assets. The company also plans to expand its renewable energy mining products and continue developing its own Bitcoin mining machine.
Source: Coindesk, Cointelegraph, Decrypt, Bitcoin Magazine, PRWeb
