Victoria-based Blockstream raises $266M, valued at $4B

Blockstream is the ninth BC-based technology business to publicly pass a billion-dollar valuation—through fundraising, an initial public offering or sale—in nine months.

Victoria-based Blockstream, which specializes in Bitcoin and blockchain technologies, has raised ~$266 million (USD$210M) in a Series B round, valuing the company at $4 billion (USD$3.2B).

Blockstream is the ninth BC-based technology business to publicly pass a billion-dollar valuation—through fundraising, an initial public offering or sale—in nine months.

Lead investors in the round include British investment giant Baillie Gifford and iFinex, which owns cryptocurrency exchange Bitfinex. Blockstream previously raised a USD$21 million seed round in 2014. Two years later it revealed USD$55 million Series B financing, bringing its funding at the time to USD$76 million. Then in November of 2017, the company took in between USD$10 million from DG Lab Fund, a division of open innovation platform Digital Garage (per TechCrunch).

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The company's other major investors include AME Cloud Ventures, Axa Strategic Ventures, Blockchain Capital, Digital Currency Group, Future \ Perfect \ Ventures, Horizons Ventures, East Ventures, Khosla Ventures, Mosaic Ventures, Real Ventures, Seven Seas Partners and other firms, according to its website.

Blockstream was founded in 2014 by Adam Back, Erik Svenson and Pieter Wuille. The company’s first major development, released in 2015, was Sidechain Elements. Sidechains are essentially distributed ledgers (blockchains) that are interoperable with each other and, in this case, with Bitcoin. This enabled developers to develop new applications on Bitcoin without impacting its core code.

Since then, the company has released a number of powerful blockchain technologies. For example, there’s Liquid Network, a sidechain technology that enables faster Bitcoin settlements while enabling financial institutions to tokenize assets. There’s also Blockstream Green, an advanced consumer Bitcoin wallet.

The company is also harnessing satellite technology. Its satellite network broadcasts the Bitcoin blockchain around the world 24/7 for free, reducing the risk of network interruptions and providing remote areas without reliable internet connections with the opportunity to use Bitcoin.

In connection with today’s funding news, Blockstream also announced the acquisition of the intellectual property and core team of Spondoolies, a Bitcoin mining hardware manufacturer.

Blockstream CEO Dr. Adam Back said the acquisition was made so Blockstream could launch an enterprise-class miner next year and move into ASIC development. “The Spondoolies team’s pedigree in Bitcoin ASIC design and engineering complements our enterprise-class mining infrastructure, and will accelerate our continuing expansion and decentralization of the Bitcoin mining space."

ASIC is short for Application-Specific Integrated Circuit—basically chips that are designed for a very specific purpose. In this case, the purpose is theoretically fast and efficient Bitcoin mining.

Both the funding and acquisition will advance Blockstream’s other mining products and services, including the recently announced Blockstream Energy product, which is meant to maximize renewable energy investment returns at power production sites.

The plan is to use this mining infrastructure around the world, including Blockstream’s collaboration with commerce giant Square to develop an open-source, solar-powered mining facility in the United States.

The new capital will also expand Blockstream’s mission to build the financial infrastructure of the future, with Bitcoin-focused financial products and its Liquid Network, which is operated by a federation of cryptocurrency companies located around the world.

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