The Bitcoin-focused development and infrastructure firm Blockstream is seeking fresh funds at a valuation that “may be below $1 billion,” or about 70% lower than its most recent funding round in 2021, according to a Bloomberg report.
Blockstream’s valuation has likely been impacted by the collapse of crypto exchange FTX, as well as the generally bearish sentiment in the bitcoin and crypto markets, the report said, citing “people familiar with the matter.”
Valued at $3.2bn in 2021
The firm, which is led by the Bitcoin pioneer and cryptographer Adam Back, was valued at $3.2bn during its latest funding round last year, when it raised $210m from a number of prominent companies. Among them was the major asset manager Baillie Gifford, and iFinex, the company behind crypto exchange Bitfinex and stablecoin issuer Tether.
Asked by Bloomberg about the size of the funding round, Back reportedly declined to answer, but instead said the company plans to use the funds to expand its hosting capacity for Bitcoin mining machines.
“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,” Back was quoted as saying.
He added that prices for hosting mining equipment have risen in recent quarters, despite a fall in the spot price of BTC.
“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,” Back said.
Bitcoin mining with renewable energy
Blockstream said earlier this year that it is working with former Twitter CEO Jack Dorsey’s company Block Inc. to build a Bitcoin mining farm powered by solar. In addition, the Bitcoin company is also working with Block Inc. and Norwegian maritime industrial conglomerate Aker to “pursue alternative and renewable energy Bitcoin mining.”
Blockstream was founded in 2014 and is headquartered in British Columbia, Canada. Among its best-known products is a side-chain to Bitcoin known as Liquid, and the Jade hardware wallet.