Bitcoin and blockchain technology company Blockstream is seeking fresh capital at a much lower valuation than last year’s $3.2 billion.
Canada-based Blockstream raised $210 million in August 2021 in a Series B round with U.K. investment firms Baillie Gifford and Ifinex. The capital raised in that round gave Blockstream a valuation of $3.2 billion. Founded in 2014 to provide infrastructure and applications for the Bitcoin network, Blockstream raised $299 million in various funding rounds. This year, the company’s value could now be less than $1 billion, according to a Bloomberg report.
Blockstream CEO Adam Back declined to reveal the seeking size of funding. Yet, he added the funds would be used to expand the capacity to host miners:
We rapidly sold out all of the capacity and have a big backlog of existing and new customers with miners seeking large-scale hosting with us.
In April 2022, Blockstream partnered with Block Inc. to build a solar and battery-powered Bitcoin mining facility in Texas. Adam Back wanter to build a transparent mining facility committed to carbon neutrality:
We figured we would actually make it a reality and public information in a more transparent way that’s usually done for sort of commercial competitiveness reasons so that we can have a more informed discussion. If we publish the raw data, the raw financial information, it speaks for itself.
Many cryptocurrency miners have been distressed by the drop in the price of bitcoin and other tokens, as well as the sharp rise in electricity prices.
Related: Bitcoin mining revenue at its lowest since 2020
Back said to Bloomberg:
While Bitcoin price and mining profitability are down, hosting rates have risen over the last quarters and our mining services are a rapidly expanding, high-margin enterprise business for us.
Blockstream is another company caught in the vortex of venture funding due to FTX’s collapse. Crypto unicorns Amber Group and Blockchain.com are also in the process of raising funds. They are reportedly raising funds at the same level or at lower valuations than in previous rounds.
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