Cloud-mining service provider BitFuFu, backed by industry giant Bitmain, will go public through a merger with a blank-check firm in a deal that values the combined entity at $1.5 billion. This valuation is 4.6x 2022 projected revenue and 3.3x projected December 2022 annualized recurring revenue.
BitFuFu is merging with a special-purpose acquisition company called Arisz Acquisition, which will become a wholly-owned subsidiary of BitFuFu.
The new company will retain the NASDAQ stock market listing, trading under the new ticker symbol “FUFU”. The transaction will provide $129 million in cash, including $70 million of committed private investment in public equity, or PIPE, at $10 per share. This capital injection will be financed by bitcoin mining-rig maker Bitmain and mining pool firm Antpool Technologies.
Existing BitFuFu stockholders are retaining 100% of their equity in the combined company. According to the announcement, the transaction positions BitFuFu as a potential disruptor in the cryptocurrency mining sector. As founder and CEO of BitFuFu, Leo Lu will continue to lead the combined organization following the conclusion of the SPAC transaction.
Leo Lu, the Founder and CEO of BitFuFu, commented: “Entering this transaction now is the most optimal and strategic timing for enduring our rapid growth trajectory and increasing our global footprint in the crypto-mining industry. This milestone of becoming a publicly-traded company through our merger with ARIZ will further drive improvements to our corporate governance, increase transparency and attract new talent to help us achieve our vision of becoming the top digital asset mining company.”
Migration of mining power from China to North America
The proposed merger has been approved by the boards of directors of both companies, and it is anticipated to be completed in the third quarter of 2022. Still, the transaction is subject to regulatory clearances, shareholder approval for the transaction and other customary closing conditions being met.
According to a company press release, BitFuFu aims to provide one-stop hashrate solutions for miners of all sizes, including cloud-mining, self-mining, and miner hosting—effectively offering a chance for crypto enthusiasts to mine crypto without having to pay hefty upfront costs or purchase expensive mining hardware.
This milestone hastens the migration of more global mining power from China, which once hosted around 75% of the world’s bitcoin mining capacity, to North America. Well before China decided to crackdown on mining facilities, the landscape has been shifting as more regions want to plug into the grid.
With fresh capital in hand, BitFuFu is poised for further success with these funds set to go toward the acquisition of mining rigs and optimization of its renewable energy technology in those warm conditions.
