Chinese Bitcoin Miner Canaan Eyes Raising $400m in US IPO

A year after it shelved its initial public offering (IPO) in Hong Kong, cryptocurrency mining hardware maker Canaan Inc has filed with the Securities and Exchange Commission (SEC) to list in the US.

The Hangzhou-based company, which was founded in 2013, has set $400 million as a placeholder amount for its listing on the Nasdaq under the symbol “CAN”. This is the same amount that Canaan sought to raise when it filed its IPO in Hong Kong last year.

However, the company shelved its IPO plan in Hong Kong six months after its filing. According to sources, Canaan decided to cancel its IPO in the city as regulators tightened its scrutiny on cryptocurrency firms.

It was originally rumoured to raise up to $2 billion in its Hong Kong filing but decided to trim the amount to $400 in its June filing. Its competitor, Bitmain, also shelved its planned Hong Kong IPO.

According to Canaan’s US SEC filing, it sells computer equipment under the “Avalon” brand with fast customized chips that win digital coins by solving complex math problems. It reported 2.7 billion yuan ($394 million) of revenue in 2018, up by 106.8 per cent from 2017, when it posted total net revenues of 1.3 billion yuan.

“We were the second largest designer and manufacturer of Bitcoin mining machines globally in terms of computing power sold in the six months ended June 30, 2019,” Canaan said, citing a study conducted by Frost & Sullivan.

During the same period, the company’s mining machines sold accounted for 21.9 per cent of the combined computing power of all the bitcoin mining machines sold globally.

The company said it will use the proceeds from its US offering for reseach and development related to AI and blockchain algorithms, expansion of its business globally, and for general corporate purposes.

Canaan works with Credit Suisse, Citigroup, China Renaissance and CMB International for its Nasdaq IPO.

The price of Bitcoin experienced a significant drop in 2018 and remained relatively low through the end of the first quarter of 2019, while experiencing some recovery starting from the second quarter.