Bitfury Secures $80M in Private Placement
Bitfury Group, the San Francisco-based maker of bitcoin mining hardware, announced today that it has closed a $80 million private placement funding around. This may indicate that the company, which was rumored to be working on an initial public offering, has opted to delay carrying the IPO path for now.
Institutional and corporate investors in Europe, Asia and the U.S. engaged in Bitfury’s $80 million private placement, led by Korelya Capital, the European arm of South Korea’s Naver Group. Participants also included Macquarie Capital, Dentsu, Armat Group, Jabre and Lian Group, Argenthal Capital Partners, MACSF, Mike Novogratz’s Galaxy Digital, and itech Capital. Investment bank Bryan, Garnier & Co. advised Bitfury on the process.
“2018 has been a year of incredible expansion for Bitfury. This private placement reflects our achievements, and it recognizes our capacity to deal with adjacent market segments in high-performance computing, such as in emerging technologies like artificial intelligence,” said Valery Vavilov, CEO and co-founder of Bitfury. “The institutionalization of blockchain and cryptocurrencies, partnered with the opportunity of these emerging technologies, is a pure growth opportunity that Bitfury will assemble on – in 2019 and outside.”
It’s long been expected that Bitfury would eventually seek an IPO. And just last month it was reported that the company had been connected with a range of investment banks about the possibility of taking its business public by following year. This was meant to be at an expected valuation of between $3 billion to $5 billion dollars, based on about half a billion dollars in yearly revenues.
The transfer could have made Bitfury the first European company in the area to achieve this and would have allowed it to raise public funds needed to fend off competition from Asian producers such as Canaan Creative, Ebang Communication and above all Bitmain Technologies. But by deciding to proceed with a private placement rather, Bitfury might be signalling that it is willing to await a better chance to go public in a more bullish market down the line.
“This private placement will require our company governance to another degree, broaden our financial tactical possibilities, and ideally position us for our second phase of growth as the market matures,” explained George Kikvadze, executive vice chairman of Bitfury.