Bitcoin mining company KnCMiner has raised $15m in Series B funding.
Led by international venture capital fund Accel Partners, the round also included existing investors of the Stockholm-based mining company GP Bullhound and Creandum, as well as noted Swedish investor Martin Wattin.
Creandum led the mining firm's $14m Series A round, announced in September, which also saw participation from GP Bullhound.
KnC says it plans to use the latest funding in expanding its operational capacity, as well as furthering the development of its next-generation 16-nanometer mining chip.. According to co-founder and CEO Sam Cole, the company has finalised the design of the 16nm chip and expects a smooth development process to take place over the months ahead.
The move comes amid a period of change in the mining space, particularly for hardware manufacturers, after months of declining mining profitability.
KnC itself has faced complaints in recent months regarding late shipments, malfunctioning equipment and sporadic customer service. The firm's shift away from consumer-facing products was first revealed by Bloomberg News in October.
In an interview with CoinDesk, Cole said that KnC is continuing its shift away from being a provider of retail mining hardware and toward a dual role as cloud services provider and bitcoin transaction processor, explaining that the 16nm chip the company will form a key part of its future growth.
"It's an arms race, and we need a great weapon to be able to compete," he said.
VCs bullish on mining's future
Cole said that Accel's participation in the round indicated growing interest among a broader range of investors in bitcoin and expressed the belief that more diverse sources of capital will enter the bitcoin space, with a focus on mining in particular, in the months ahead.
As part of the Series B deal, Accel partner Michiel Kotting will become a member of KnC's board, while Fred Destin, also a partner, will act as an observer.
"We are excited to back the KnCMiner team, as they have proven to be world-class operators in a very dynamic marketplace. We strongly believe in the long-term potential of bitcoin technology and see large-scale miners like KnCMiner playing a crucial role."
Creandum general partner Staffan Helgesson added in a statement that his firm welcomes a broader investor pool for KnC.
"We believe KnCMiner will be one of the key infrastructure companies in the bitcoin ecosystem long term," he said.
Image via Shutterstock