BitFarms Secures Funds Worth $20 Million as Strategic Loan from Dominion Capital
One of the largest blockchain companies in the world, BitFarms Ltd has announced that it has secured a strategic loan of $20 million. The announcement came through BitFarms’s subsidiary Backbone Hosting Solutions Inc., and it will be utilized for funding the company’s expansion plans.
The loan, which in fact is strategic debt financing, will be furnished by New York-based Dominion Capital LLC. The total of $20,000,000 will be disbursed in 4 installments of $5 million each. BitFarm was able to bag the funds on the back of its recent satisfactory report cards, both in terms of customer satisfaction and infrastructural advancements.
Blockchain technology, which was first introduced as a platform for Bitcoin and other cryptocurrencies about a decade ago, has now become one of the prominent technologies of the 21st century. Several studies have been conducted on the technology to explore its potential and opportunities for commercialization. The results have been overwhelming, and have a loud company to invest big time in the innovative tech.
Behemoth corporations like IBM, Facebook, JPMorgan, HSBC, TCS, and Apple have all jumped in the distributed ledger game. IBM, in particular, has gone all guns blazing in the blockchain space globally, by signing the deal in countries like Australia, Canada, etc. JPMorgan became the first bank in the US to launch its own cryptocurrency, while HSBC completed forex transactions in 2018, worth a mindboggling $250 billion using blockchain technology. All of these indicate the success and popularity blockchain has garnered over the past few years.
Emerging markets like India are also leaving no stone unturned, as tech giant TCS has decided to lead the way for blockchain development in the world’s fastest growing economy. On the other hand, apart from private corporations, governments across the globe, too, are making arrangements to introduce blockchain in their departments. Recently, governments of countries like Australia, Argentina, Canada, Russia, etc., have taken giant strides in this direction.
Companies like BitFarms, who specialize in innovative technology, realize very well that the market is growing rapidly and they can benefit tremendously from this. Along with the announcement of these funds, the company also informed about its Special General Meeting to be help on. March 28, when the share exchange between BitFarm Israel and BitFarm Canada would propose to support the companies Canadian listings.
The loan sanctioned by Dominion Capital is at 10% interest rate, and each tranche disbursed will have a term of 24 months. The outstanding balance at maturity of the term will have balloon repayment. Dominion Capital will also acquire approximately 6.7 million equity purchase in BitFarms Ltd (Canada) in a case full $20 billion is withdrawn. The warrants will be exercised to acquire common shares of BitFarms Canada with a term of five years from the date of issuance at an exercise price of US$0.40 per share. If the arrangement is failed, the warrants above shall become an obligation on the company.
Wes Fulford, Chief Executive Officer of BitFarms, stated that the ring from Dominion would help the company to pursue its expansion strategy more effectively, underpinned by the company’s mammoth and economic 162.5-megawatt portfolio of green energy in Québec. BitFarm Ltd provides computing services to cryptocurrency networks like Bitcoin, earning fees from each network for securing and processing transactions.
Fulford also revealed the company’s plans to purchase latest and more efficient mining hardware for its expansion and will begin immediate construction of Phase 1 and Phase 2 of BitFarms’s new modern computing center in Québec.
Cryptocurrency market had its worst period in 2018, as many tokens losing as much as 90% of their value. Bitcoin, the largest cryptocurrency, also kept losing for six consecutive months, finally breaking the trend in February this year. This bearish trend also affected BitFarms’s business; however, the fresh funding is expected to push growth for the company.