Canaan Creative is one of the leaders in mining rig manufacturing has closed a funding deal which might be valued in hundreds of millions of US dollars, taking the overall valuation of the company to $1 billion.
The report was published by Securities Times, a Chinese financial news publication, but the company denied to comment on the latest development. However, two close sources to the company affirmed the published report without giving any further details on the numbers.
The producers of the Avalon range of mining machines have generated quite a hefty sum in its latest funding round. The latest funding reports have emerged after a month of the companies official IPO listing on the Hong-Kong stock exchange, which failed to gain any momentum and subsequently became invalid.
Only this January another report for IPO listing of the firm was doing the rounds which were speculated to take place in New York. The latest round of funding would do a world of good for the firm, given the bearish market trends have cut down the market valuation of cryptocurrencies by a significant amount. The bearish market had quite a devastating impact on mining rig manufacturers, where most of these firms have reported a significant loss in the last quarter of 2018.
Cannan Rivals Filed For IPOs Too
Two of the major rivals to the Canaan, Bitmain, and Ebang, both filed for their respective IPOs in September and June of 2018 respectively. However, as the bearish market continued to run havoc, Ebang disclosed in December that they have incurred heavy losses in revenue and gross profit for Q3 of 2018.
Similarly, Bitmain also registered losses worth $500 million in its last quarter which they updated with the Hong Kong Stock exchange as a part of the IPO application. If Bitmain fails to graduate to a listing hearing by March 26, six months after its initial filing, their application might also lapse, just like the initial filling of Canaan.
2018 was a year worth forgetting for everyone associated with the crypto space, be it investors, new startups or even the businesses like mining rig manufacturers, as the longest crypto winter made it impossible for anyone to gain some upward momentum.
Mining rig manufacturers like Bitmain and Canaan took the worst hit as mining operations amid bearish trends have become almost unprofitable, not just for individual miners but even the firms who are running an entourage of several mining rigs together.
The profit margin is so thin that at the peak of the bearish trend most of the individual miners in China had to sell their mining equipment in the second-hand market against the weight of the machines.
The fresh round of funding might give Canaan another chance to look back and plan their future endeavors with more precision and fewer risks.