Bitmain is losing big-name investors

In its latest funding round, Bitmain is quickly losing its star investors. Denials of participation follow one after another.

At the beginning of the month, Chinese media were full of headlines about the closing of the final round of funding by mining giant Bitmain. According to them, this round, designed to raise the company's value to $15 billion before the IPO, was supported by investments from Softbank, Uber's largest shareholder, Tencent, a leading Chinese IT company and China International Capital Corporation (CICC). Bitmain, was expected to debut its initial public offering on the Hong Kong Stock Exchange (HKEX) with US dollar-denominated shares.

The announcement follows a successful Series B funding round in June, when the company managed raise $400 million from several leading venture capital funds, which at the time valued the mining giant at $12 billion.

However, following successful reports of the successful closing of the latest round of funding, denials followed. So the Japanese Softbank did not confirm its participation in financing Bitmain. At the beginning of the month, an anonymous source claimed that Softbank acquired shares of the mining giant worth $1 billion. Only now the company has issued an official denial.

The same source also claimed investment support for the manufacturer of equipment for miners by Tencent. Yesterday, the Chinese IT giant also officially announced that it is not participating in the financing of Bitmain.

Another company, China International Capital Corporation (CICC), refused to comment on this situation, neither confirming nor denying it. 

It remains unclear whether Bitmain will be able to follow through on its plans to raise $18 billion for an IPO without the support of such large investors.

If the round is successful at $18 billion, it will raise the company's value to an estimated $30 billion. Additionally, with an $18 billion IPO, Bitmain will rank first among the five largest initial public offerings in history behind Alibaba and ahead of Facebook.

According to Forbes, Bitmain earned $2.5 billion in 2017 and had a net profit of $1.1 billion in the first quarter of 2018. About 96% of all revenue comes from the sale of its mining equipment, and only 3% from cryptocurrency mining and other services. The company estimates that it controls about 85% of the crypto miner market and operates several of the largest mining pools..