Beijing-based Bitcoin mining giant Bitmain has finally decided to go public by filing an IPO on the Hong Kong Stock Exchange (HKEX). Bitmain, embroiled in several controversies in the past, has finally decided to open its books. A sneak-peek into the company’s books shows a massive growth of the company in the last few years.
Bitmain Technologies has been mulling for huge fundraising in the past. However, the application is currently under by HKEX and it remains unclear about the valuations at the time of listing. Let’s take a look into the costs and revenue structure and other details of the company, as provided.
No doubt that Bitmain is the market leading for crypto-mining equipment grabbing a whopping 75% of the total market share. Bitmain’s revenues and profits surged at an unprecedented rate during the crypto-mania of the last year.
In 2015, Bitmain revenues stood at $137.3 million which shot to $2.5 billion by 2017 end. This is a blistering annual compounded growth rate of 328% over the last two years. Additionally, by June 30, 2018, this year’s revenue has already past of the last entire year, standing at $2.8 billion.
Subsequently, the profits have also climbed at a similar monumental growth rate. From $48.6 million in 2015 to $952.6 million two years later in 2017, Bitmain has achieved a stellar 280 percent compound annual growth rate.
A look into the revenue breakdown as presented by the company shows that the mining hardware has consistently contributed to Bitmain’s revenue stream. All credit goes to Bitmain’s application-specific integrated circuits (ASICs). The ASICs have proved to be game-changers and toppled GPUs market share in a number of countries. Notably, there is also an uptick in the mining hardware sales – from 79% in 2015 to 94% by the first half of 2018.
Recently, Bitmain also announced its foray into new sorts of mining hardware apart from the conventional ASICs. The prospectus notes: “We have focused on developing mining hardware with different algorithms covering major cryptocurrencies, including Bitcoin, Bitcoin Cash, Ether, Litecoin, Dash and Zcash, which makes us one of the few companies offering mining solutions for various cryptocurrencies.”
In addition to laying focus on new mining hardware, the company is on the spree of land acquisitions for crypto mining farm sites. As per the latest filings, Bitmain has two huge land areas owned in Mongolia. Additionally, it also owns one big land area each in Ningxia and Sichuan.
The company is also said to have rented nearly 50 properties across 5 different domestic locations amounting to a total land area of nearly 100K square meters. Bitmain has also shown interest in the overseas expansion of its mining operations. The crypto mining giant has set its eye on some U.S. States of Texas, Tennessee, and Washington. It is also exploring the Canadian province of Quebec due to the availability of cheap electricity.
Bitmain has already started construction on these sites and the American and Canadian farms shall start its operation by Q1 2019. Apart from crypto mining farms, Bitmain has established administrative offices at a number of places across the Asian and European continent.
Bitmain has raised huge sums in three fundraising rounds contributed by big venture capital firms across the U.S and Asian markets. In the Series A round, Bitmain managed to raise a total of $50 million led by led by SCC Venture. The same company led the Series B funding round in June 2018, which closed at $292 million.
In the recent pre-IPO funding round in August, Bitmain managed to pocket a whopping $422 million. The pre-IPO was led by Crimson Partners along contributing around $150 million.
Additionally, Bitmain has also worked with big global corporations to advise it on IPO filing. Bitmain received the financial advisory from Hong Kong Securities Limited, China International Capital Corporation, and Commerce and Finance Law Offices. The legal, auditing and consulting services were provided by Calder in Hong Kong, KPMG, and Frost & Sullivan.