Crypto infrastructure firm Blockstream raises $125 million for Bitcoin mining
Crypto infrastructure company Blockstream raised $125 million in convertible notes and secured debt financing to expand its bitcoin mining hosting services.
The company, which raised $210 million in August at a valuation of $3.2 billion, said in a press release Tuesday that it will use the proceeds from the new capital to expand its mining facilities to meet strong demand for large-scale hosting services, according to the statement . . “Hosting has remained a robust market segment compared to ‘prop’ miners (and their lenders) who have been more directly exposed to bitcoin price volatility and compressed margins,” the statement added.
Blockstream’s new funding round did not mention the valuation of the company. However, Bloomberg reported on December 7 that the company is seeking to raise funds at a 70% lower value than in the previous round, below $1 billion.
Hosting is a service that data centers provide to crypto miners so that 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 the crypto winter has weighed on the industry and capital markets have been essentially inaccessible to many.
Blockstream was founded in 2014 with a focus on building infrastructure and applications based on the Bitcoin network. The firm was co-founded by CEO Adam Back (inventor of Hashcash, a system for countering 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 exchange settlements and helps financial institutions tokenize assets. The company also plans to expand its renewable energy mining products and continue to develop its own bitcoin mining machine.
“This fundraising allows us to accelerate [year-over-year] revenue growth we created with our 2021 Series B and continue to build infrastructure for the Bitcoin economy of the future,” said Blockstream President and CFO Erik Svenson. “We remain focused on reducing risk for institutional bitcoin miners and enabling enterprise users to building high-value use cases on the most secure, robust and scalable blockchain in the world – Bitcoin,” he added.
