today,
today,Caixin reported, Bitmain completed the B round of financing, with a financing scale of 300-400 million US dollars and a valuation of about 12 billion US dollars. This round of investment was led by Sequoia China, followed by American hedge fund Coatue and Singapore state-owned investment fund EDBI. Odaily asked Bitmain for confirmation, but the other party said it would not comment.
JuneJanuaryandJune, the media has revealed that Sequoia China participated in Bitmain’s US$400 million Pre-IPO financing, and the latter, as always,no comment. also,September last year, Bitmain has received $50 million in investment from Sequoia Capital and IDG Capital.
Previously,
Previously,Canaan Yunzhi, the second mining machine manufacturerand listed marketThe third Ebang International, have successively disclosed prospectuses on the Hong Kong Stock Exchange. These seem to be revealing a signal to the market: mining machine manufacturers must go public.
The three major mining machine manufacturers have been listed together, and at the same time, the regulatory attitude towards digital currency mining has been tightened in the past two years.This is very similar to the listing tide of Internet financial platforms back then——If you don’t go public, you may be worried that you won’t be able to get on the market. Observers have the following judgments on the listing opportunity of the mutual gold platform: (1) the profit of the mutual gold platform is at its peak, and the customer acquisition bonus will pass away. The essence of finance is a risky business, and profits are closely related to the willingness and ability of borrowers to repay. Many mutual financial platforms have little risk control in the early stage, and subsequent risks will gradually be exposed. (2) The policy risk is tightened. Once the P2P filing qualification is not obtained, it is likely to affect the subsequent valuation.
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The concept of blockchain is hot, and the valuation is at its peak
For blockchain companies, this year is also the "peak valuation". Since the end of 2017, blockchain has become the most popular outlet after artificial intelligence. The upsurge has swept from the first level to the second level. The once despised Bitcoin has gradually been washed away, but there are few real blockchains in the secondary market. company of.
Blockchain is an emerging industry, among which there are not many mature companies, and mining (mining and mining machine production) is one of the oldest industries. They took advantage of the spring breeze to usher in the opportunity to go public. Of course, new concepts of science and technology will always experience a bubble period when they first come out, and future bubbles will inevitably bubble. This is the best time for them to raise funds.
In addition, the currency price experienced another wave of surge at the end of the year and the beginning of the year. The popularity of the concept drove leeks into the market, and the currency market ushered in a wave of bull market. The price and sales volume of mining machines are closely tied to the currency price, and the income of several major mining machine manufacturers has risen accordingly. The currency market was good in the past two years, and Jianan Zhizhi’s profit rose to 361 million yuan in 2017.Equivalent to more than 230 times that of 2015image description
After experiencing the madness at the end of the year, the currency market gradually turned bearish in 2018. Bitcoin, which rose above $10,000 last year, once fell below $6,000 this year; the price of Ethereum also turned weak after two small peaks at the beginning of the year. The mining industry then fell into a downturn, the price of mining machines was cut in half within 20 days, and the mining profit rate dropped from 300% to 100% and 30% annually. The mine owners said, "If the currency market continues to bear like this, no one will be able to sustain it."
Mining machine manufacturers need to seize this window of good valuation and profit.
China's digital currency mines forced to close as regulations tighten
In addition to valuations being at an inflection point, the regulatory environment is also facing greater uncertainty.
Canaan Creative has tried to go public on the GEM backdoor and listed on the NEEQ successively, but they were repeatedly inquired by the exchange.According to Time Weekly, This is mainly because "the mining industry is not a government-supported industry in China, and the capital market is not well accepted." A senior researcher in the blockchain industry said that the company's main business involves industries related to cryptocurrencies, and supervision There are more concerns about its listing. Canaan and Yibang International may therefore turn to overseas listings.
Bitcoin has been in a regulatory gray area since its birth, and has been subject to regulatory purges many times, including anti-money laundering in June 2017 and the ban on ICO and on-site transactions in September. The mining industry, while not supported by regulation, has never directly intervened.
according to
according todaily economic news report, On January 2, 2018, the Mutual Finance Rectification Office issued a document requiring all localities to guide enterprises within their jurisdiction to withdraw from the "mining" business in an orderly manner.According to Caijing, The regulatory authorities have plans to gradually cancel preferential policies such as electricity prices, taxes, and land. The supervision also indirectly caused the cost of domestic electricity prices to rise sharply. Many small domestic mines were forced to close down, and large mines moved overseas.
Most of the mines in the world are located in China, which means that most of the buyers of mining machines are Chinese. Chinese regulation will inevitably affect the profits in the mining machine market. In 2017, the annual revenue contributed by Canaan Creative's clients outside of China accounted for only 8.5% of the total revenue. Its prospectus mentioned: "If the Chinese government completely prohibits mining, holding and using bitcoin, we will not be able to sell our products in China, and we may not be able to generate enough sales overseas to make up for these business losses. .”
What's more, the attitudes of various countries towards cryptocurrencies are still unclear.
The tightening of supervision is superimposed on the upsurge of blockchain, and now it is an opportunity to go public.
A single revenue depends on the currency market, and the competition for mining chips is becoming more and more fierce
Listing is imperative, but not overnight.
As the leader in the mining machine industry, Bitmain's market share is 3-5 times that of the second place. In an interview with Bloomberg, Wu Jihan revealed that Bitmain’s revenue reached US$2.5 billion last year. This is 12 times that of Canaan Yunzhi. However, if mining machine manufacturers want to go public, they are likely to face the same problems: the company’s revenue is single, profits are greatly affected by currency prices, and traditional chip manufacturers enter the competition.
The prospectuses of Jianan Zhizhi and Yibang Network both show that mining machine sales account for more than 90% of revenue. A single income structure means that the operating risks are not sufficiently dispersed, and the mining machine industry is extremely sensitive to currency prices, and the currency market is highly correlated and volatile.Tsinghua Tongfang ResearchEver had a look at the future bitcoin price relative to$8000The fluctuation of the break-even point is a sensitivity test for the impact of Canaan Zhizhi’s revenue.
In 2017, Jianan Zhizhi’s revenue was 1.3 billion yuan and its net profit was 360 million yuan. Tongfang Research assumes that the price of Bitcoin will increase by 10%, 50%, and 100% in 2018, and the company's mining machine sales revenue is estimated to be 500 million, 2.5 billion, and 5 billion yuan, respectively, an increase of -61.5% and -92.3% year-on-year in 2017 , 284.6%. Assuming that the currency price drops by 10%, 30%, and 50% (corresponding to US$7,200, US$5,600, and US$4,000), the company’s mining machine sales revenue is estimated to be 225 million, 175 million, and 125 million yuan, respectively, which are significantly higher than in 2017. slide.
The bad news is that the current currency price has fallen again and again (around $6,000), and the demand for mining machines has fallen.
The bear market is not young, and the competition enters the market.
Originally, ASIC mining chips were a special event for mining machine manufacturers, and traditional chip manufacturers such as AMD and Nvidia only involved GPU mining currencies. Often after Bitmain enters the market, GPU is not very competitive.
Interestingly, this year, traditional chip manufacturers have also begun to get their hands on ASIC mining chips.At the beginning of the year, there were media reports, Samsung is producing mining hardware, which will be mass-produced by the end of January. From the perspective of investors in the secondary market, they also tend to use Bitmain and Nvidia as references. It can be said that Bitmain's competitors are no longer mining machine manufacturers but traditional chip manufacturers.
The two major futures that Bitmain talked about: artificial intelligence chips + blockchain industry ecology
Mining machine manufacturers need to smooth the risk of cryptocurrency, and also need to fight against the entry of competitors.
The solution is simple: before Nvidia becomes Bitmain, Bitmain must first become Nvidia.
Jianan Zhizhi stated in the prospectus that it is investing a lot of resources in research and development of artificial intelligence products. The company has started developing ASIC chips for artificial intelligence applications in 2016, and plans to mass-produce an edge computing chip called KPU in the fourth quarter of 2018.Bitmain launched the AI brand SOPHON in November 2017BloombergBloombergDuring the interview, he said that within five years, nearly 40% of Bitmain’s revenue will come from AI chips.
Mining chip manufacturers are turning to AI natural companies, but it is undeniable that Bitmain and Canaan are facing more powerful opponents in this industry: Nvidia, AMD, Intel, Qualcomm, Google, etc.
If Bitmain has been doing chip research and development for five years, the longest history of these manufacturers is 50 years.
There is no doubt that in the field of AI chips, Bitmain is a latecomer. Just look at Qualcomm and Intel to see how important the first-mover advantage in the chip field is.
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In short, the first round of the AI chip battle is over. It is not easy for Bitmain to break through.
Obviously, Bitmain is not only betting on AI chips, but also on blockchain, which is regarded as the next generation of Internet.
Not to mention its long-standing mining industry, Bitmain is passing through the blockchain fieldintensive investmentBlockchain privacy solution provider StarkBlockchain enterprise node monitoring platform Path、Blockchain privacy solution provider Stark…Bitmain rarely discloses capital actions, we can only spy on one or two, but cannot describe its entire investment territory.
Despite the controversy,Bitmain is still a Story Teller with blockchain and artificial intelligence on the one hand, holding two futures.
Bloomberg once gave Bitmain a valuation of US$8.8 billion based on the market capitalization of Nvidia and MTK (Nvidia’s 2017 revenue was US$9.7 billion and net profit was US$1 billion); today, Sequoia gave a larger valuation of US$12 billion.
In the face of the mysterious Bitmain, we may wonder: when the price of the currency is close to 20,000 US dollars, its annual income of 2.5 billion US dollars can undoubtedly support the above valuation; but when the price of the currency falls below 6,000 US dollars, Bitmain can still Support this valuation?
Reference reading:
I am Lu Xiaoming, editor of Odaily. I am exploring the real blockchain. Please add WeChat lohiuming for breaking news and communication. Please note your name, unit, position and reason.
Reference reading:
《Crypto Unicorns Clash While Bitcoin Droops》
《Crypto's 32-Year-Old Billionaire Mining King Considers an IPO》
"From the "C position" of mining machines to AI intelligence, Bitmain is seeking changes"
"Bitmain's competitors have changed from Avalon to Google, Nvidia"
"Exploring the Value of Canaan Intellectual Property, the First Share of Mining Machines"
