Montréal-based Bitcoin technology startup Blockstream has received $125 million in funding through convertible notes and secured loans to take advantage of the volatile cryptocurrency industry.
The company wants to enter the Bitcoin mining market, where the top players have struggled to survive.
Fulgur Ventures and other investors joined Kingsway Capital in leading the convertible note. This most recent capital investment, according to Blockstream, will go toward building out its mining operations to accommodate “the strong demand” for its institutional hosting services.
All but the most cost-effective operators are driven out of the market as Bitcoin’s market value drops along with the dollar-denominated profits available to miners. However, following Bitcoin’s most recent surge above $23,000, the typical miner can now operate at a profit once more.
“This fundraiser allows us to accelerate the year-over-year revenue growth we created with our 2021 Series B and continue to build infrastructure for the future Bitcoin economy,” said Erik Svenson. Blockstream’s President & CFO.
Blockstream reported that the first closing of their Series B round in 2021 saw a $210 million raise. With the financing, Blockstream’s value increased to $4 billion.
Blockstream’s then-CSO Samson Mow told BetaKit that the business planned to raise between $300 million and $400 million for its Series B round, even though the company hasn’t disclosed any additional money since then.
Blockstream is one of the world’s largest mining operators
Blockstream, a sidechain startup, was established in 2014. Its Liquid Network sidechain technology provides trustless Bitcoin swap settlements, smart contracts, and asset tokenization for financial institutions.
Blockstream Mining, one of its blockchain-focused product lines, offers colocation services to miners across several enterprise-class mining facilities.
Despite the volatility in the cryptocurrency market, Blockstream claims that demand for its hosting services is still high because of its strong track record and large scale, coupled with an industry-wide shortage of accessible power capacity.
With a succession of bad news stories about the cryptocurrency industry, including the demise of FTX and, most recently, Genesis, the market is in a downward trend. Bitcoin was valued at $69,000 in November 2021, but it is currently only worth about $17,000.
With 500 megawatts in the works, Blockstream bills itself as one of the biggest bitcoin mining companies in the world.
In December, several rival companies filed for bankruptcy, including Core Scientific, one of North America’s largest publicly traded miners, which had practically all of its Bitcoin assets sold off and stopped making loan payments. Core Scientific is being looked into for potentially practicing securities fraud.
