Blockstream, a global Bitcoin (BTC) company, has secured $125 million in a convertible note and landed loan financing to be used to widen its institutional bitcoin mining colocation services.
The blockchain technology company announced, stating that the convertible note was led by Kingsway Capital with participation from industry giants including Fulgar ventures, Cohen $ Company Capital Markets, and others.
With the new funds, the Canadian-headquartered crypto infrastructure will be able to boost the company’s crypto mining capacity with the aim of meeting the desired need of its institutional hosting customers. According to the firm’s president and CFO Erik Svenson, Blockstream will continually focus on minimizing the risk experienced by Bitcoin miners and ensure users enjoy more robust, secure, and scalable blockchain use cases globally.
Despite the surge in the cost of electricity that has caused many miners to default on loans and the increase in network difficulty, Blockstream is optimistic and will continually push for the expansion of its mining capacity.
Although the valuation of the firm was not disclosed, the company said in December when it was seeking fresh funds that its valuation may be below $1 billion as the company has plunged by 70%. This in return has placed the unicorn status of the blockchain technology outfit in jeopardy.
Recall that in 2021, the BTC leader secured $210 million in a series B funding round which pushed the valuation of the company to $3.2 billion. Following the funding round, Blockstream successfully raised another $16 million for its BTC Mining Notes (BMN) via Security Token Offerings (STO).
Bitcoin Miners face a Difficult Season
A protracted crypto winter combined with the collapse of industry heavyweights like the likes of FTX has affected profitability in the subsector. As previously reported by TheCoinRise, the top 10 publicly listed miners sold almost all of the Bitcoin they mined in 2022 to fund operations and repay debt. Also, some of the miners were forced to sell their assets to avoid bankruptcy.
Just recently customers of Compass Mining sued the firm and are now seeking $2 million in damages from the firm for failing to return their Bitcoin mining machines after severing ties with its hosting partner.