Bitfury Considers Europe’s First Major Crypto IPO

(Bloomberg) -- Cryptocurrency-mining startup Bitfury is weighing strategic options including an initial public offering in what could be Europe’s first major listing in the industry, according to people familiar with the matter.

Bitfury has reached out to global investment banks as it explores making its trading debut in Amsterdam, London or Hong Kong as early as next year, the people said, asking not to be identified as the details aren’t public.

The blockchain-technology company is exploring a range of options and could decide to raise debt financing or sell a minority stake, the people said. No final decisions have been made, they said. If Bitfury goes public in the next two years, it could seek a valuation of $3 billion to $5 billion, though numbers are early estimates and could change depending on markets and the industry, the people said.

A representative for Bitfury declined to comment.

Questions about the future of cryptocurrencies and the lack of uniform regulation have led some investment banks to avoid advising on such IPOs, the people said.

Investment Appetite

Still, large institutions are opening up to investments in the sector. Fidelity Investments announced a new business this month to manage digital assets for hedge funds, family offices and trading firms. Goldman Sachs Group Inc. and a venture founded by one of its former partners, billionaire Mike Novogratz, are investing in cryptocurrency custodian BitGo Holdings Inc., the startup said last week.

Bitfury’s revenue is a fraction of the sales generated by Bitmain Technologies Ltd., the Beijing-based virtual currency mining firm that filed for an IPO in Hong Kong last month. The industry giant may raise as much as $3 billion, people with knowledge of the matter said in August. The companies operate in a volatile market where prices hit a peak last year before a more than $600 billion rout in digital assets this year.

Bitfury, a maker of crypto-mining gear that was founded in 2011, posted revenue of about $450 million for the 12 months through March. Chief Executive Officer Valery Vavilov and co-founder Valery Nebesny share a majority stake in the company, Vavilov has said previously.

Super-Fast Computers

Mainly a tech-hardware company, Bitfury has garnered attention in recent months for its capabilities in keeping its super-fast machines cool by submerging the computers in a non-conductive liquid at a plant in Georgia and at another data center it’s expanding.
Since its inception as a Bitcoin miner, the London and Amsterdam-based firm has also ventured into other businesses involving blockchain technology, which was developed to keep a digital ledger of cryptocurrency transactions. It also makes computer chips for mining machines, as well as software and counts large institutions, companies and governments among its client base.

Companies have raised $186 billion from IPOs globally this year, data compiled by Bloomberg show. European firms that listed have gained about 2.9 percent on average, compared with 9.1 percent in North America and 4.4 percent in Asia.

--With assistance from Blake Schmidt and Alastair Marsh.

To contact the reporter on this story: Ruth David in London at rdavid9@bloomberg.net

To contact the editors responsible for this story: Daniel Hauck at dhauck1@bloomberg.net, Chitra Somayaji, Amy Thomson

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