Arkon Energy, the data center startup that uses renewable electricity to mine bitcoin (BTC), raised $28 million, led by quantitative investment manager and digital assets market maker, Blue Sky Capital.
The financing was a combination of senior debt and equity capital and included some returning investors such as Kestrel 0x1 as well as new ones, including Shima Capital, the company said in a statement. The startup has also bought Hydrokraft AS, a renewable energy-based data center in Norway, without disclosing the terms of the deal.
"The Hydrokraft purchase is part of an ambitious plan to create a vertically integrated green bitcoin mining platform that has power sovereignty, benefits from geographic diversification, and a robust balance sheet," according to the statement.
Hydrokraft's data centers are powered completely by hydro electricity and have an operating capacity of 30 megawatts (MW) which can be expanded to 60MW, Arkon said in the statement. The startup plans to immediately begin work to build out incremental infrastructure to utilize the facility’s full capacity.
The funding comes as the bitcoin mining industry has been in survival mode during the crypto bear market – dealing with not just falling prices, but also surging energy costs – leading to bankruptcies and a plunge in share prices for publicly traded companies. However, in recent months, mining companies that have access to low cost energy and more innovative business models are getting financed by investors.
"In a period in which the largest bitcoin miners in the world are struggling with high costs and over-leveraged balance sheets, the ability of Arkon Energy to attract capital highlights its unique value proposition," said Barry Kupferberg, Managing Partner of Barkers Point Capital Advisors which helped Arkon finance the deal.
Arkon was founded in 2019 and is headed by CEO Josh Payne, who is also co-founder and chief operating officer of Battery Future Acquisition Corp. (BFAC), a NYSE-listed special purpose acquisition vehicle (SPAC). As part of the new funding round, partners from Blue Sky, Kestrel 0x1, and Barkers Point Capital Advisors will be joining the startup's board. The company previously raised $2.6 million in pre-seed funding.
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