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Blockstream has over 500 Megawatts in its development pipeline to expand its Bitcoin mining facility for institutional investors.
Blockstream Inc, a leading Bitcoin and blockchain infrastructure company, has raised $125 million in a convertible note and secured loan financing. According to the announcement, Blockstream intends to use the money to expand its institutional Bitcoin mining colocation services. The just-concluded fundraising was led by Kingsway Capital and Fulgur Ventures.
This follows last year’s $210 million Series B funding round that was used to expand its institutional Bitcoin mining operations. Additionally, the company used part of the series B funding capital to acquire Spondoolies to design and manufacture its ASIC and enterprise miner.
Blockstream Taps on Bitcoin Market
With $125 million raised through debt financing, Blockstream intends to pick up on what Series B capital managed in Bitcoin mining facilities. Moreover, Blockstream has reported a sharp uptick in demand for its institutional hosting services. Notably, Blockstream has over 500 Megawatts in its development pipeline to expand its Bitcoin mining facility for institutional investors.
“This fundraise allows us to accelerate the YoY revenue growth we created with our 2021 Series B and continue to build infrastructure for the future Bitcoin economy,” said Blockstream President & CFO, Erik Svenson. “We remain focused on reducing risk for institutional bitcoin miners and enabling enterprise users to build high-value use cases on the most secure, robust, and scalable blockchain in the world – Bitcoin.”
Blockstream has secured significant funding support at a time the Bitcoin market is marred with institutional failure including the FTX and Alameda implosion. As such, the company is optimistic it will do better in revenue returns when Bitcoin prices recover from the 2022 bear market.
“With 2022 being punctuated by multiple large-scale centralized parties and protocol failures, we believe this has been a learning experience for the market: that the fundamental value of blockchains is in reducing the need to trust third parties”, said Blockstream CEO Dr. Adam Back.
Crypto Market Outlook
Bitcoin mining facilities were significantly affected by the 2022 crypto crash that saw Bitcoin move from $69k to $15k in less than a year. However, Blockstream reported a strong revenue growth year-over-year (YoY) due to high institutional demand for mining hosting services.
“Blockstream had a strong 2022 with 3x revenue growth from 2021, & strong demand for hosting into 2023 to expand for, with a return to a bullish market, with Bitcoin up 40% in the first 3 weeks of 2023 alone.”
– Blockstream CEO @adam3us for @btc
— Blockstream (@Blockstream) January 25, 2023
Nonetheless, the crypto market may not be out of the woods yet with increased sell pressure from miners and short-term holders. For instance, Bitcoin mining company Greenridge avoided bankruptcy last December after it raised approximately $74 million in capital in the last minutes from New York Digital Investment Group.
Founded in 2014, Blockstream has developed a wide range of products that are changing the landscape of Bitcoin adoption by institutional investors. For instance, Blockstream offers a liquid network and a Bitcoin layer-2 network for digital asset issuance.