Blockchain firm Blockstream bought US$125 million in convertible debt with secured debt financing
The cryptocurrency market has witnessed pure crypto winter which still continues. This affected the broader crypto market, but a small part of the space continued to maintain. Several projects and firms working in crypto received funding and gradually grew.
Bitcoin and blockchain technology development startup Blockstream also added to the list of growing companies despite adverse situations. The firm is said to have raised funding of 167.3 million CAD, equivalent to 125 million USD. The financing came in the form of convertible notes and secure loan financing.
The convertible note financing was led by London-based investment management firm Kingsway Capital. While the venture capital company Fulgur Ventures and several others also joined the round.
The Montreal-based company intends to use the funds to optimize during the volatile environment within the crypto industry. According to the company, given the strong demand for institutional hosting services of Blockstream, the capital raised after the recent investment will be used to expand the mining facilities.
In addition to enabling trustless Bitcoin exchange settlements and smart contracts, Blockstream’s sidechain technology, known as the Liquid Network, also allows financial institutions to tokenize assets. Blockstream was founded in 2014. With a focus on blockchain technology, Blockstream Mining offers co-location services to miners across a number of enterprise-class mining facilities.
Due to Blockstream’s “excellent track record and large scale, coupled with an industry-wide shortage of available power capacity, demand for its hosting services continues to be robust despite cryptocurrency market volatility.
According to Blockstream, “Hosting has remained a robust market segment in contrast to ‘prop’ miners (and their lenders), who have been more directly vulnerable to bitcoin price volatility and limited margins.”
Blockstream raised CAD 266 million, or USD 210 million in 2021 in what it described as the first close of its Series B transaction. The company’s value increased to USD 4 billion as a result of the financing.
Then CSO Samson Mow informed a news organization that the business planned to raise between US$300 million and US$400 million for its Series B investment, although the company has not disclosed any new funding since then.
According to a December 2022 Bloomberg article, Blockstream raised new capital at a lower valuation than its 2021 Series B round. People with knowledge of the situation told the publication that the valuation could be lower than $1 billion, which would rob Blockstream of its unicorn status.
