Crypto Unicorn Bitmain Weighs $18 Billion IPO, One of World's Largest

One of the most valuable cryptocurrency companies, Bitmain closed a $1 billion pre-IPO financing round on July 23 at a $15 billion valuation, nearly two times cryptocurrency exchange Coinbase's $8 billion valuation, reported in April.

Now, the possible $18 billion IPO sticker price positions Bitmain to displace social media giant Facebook as one of the largest public offerings in history.

A minimum commitment of $5 million was deadlined by July 18 and signed over to Bitmain Technologies Holding Company, the offshore Cayman Islands investment holding group that has been linked to Chinese technology billionaire Lei Jun, founder of consumer electronics company Xiaomi, Inc. Before this latest funding, Sequoia Capital China had led Bitmain's $50 million Series A and $400 million Series B rounds with the help of San Francisco's IDG Capital, Menlo Park's Coatue Management, Russia's DST Global and Singapore's EDBI and GIC. The Series A round accounted for 5 percent of shares at a post-mortem valuation of $1 billion and the Series B round valued the company at $12 billion.

Financial numbers supporting this multiple indicate that Bitmain profited $2.3 billion in total across 2016, 2017 and Q1 2018, with revenues of $2.5 billion in 2017 and $2 billion in Q1 2018.

Bitmain is forecasting $2 billion in profit by year's end.

In addition to income generated by hardware costs and pool transaction fees, Bitmain oversees its own international mining operation and has made $1 billion, $11 billion and $10 billion off of its 2016, 2017 and 2018 Q1 bitcoin holdings, respectively, revealed to the public for the first time here.

Since May, Bitmain has invested in cryptocurrency point-of-sale system BizKey, incubated decentralized exchange DEx.top, financed cryptocurrency payments system Circle, added an ethereum extension to the Opera web browser, bankrolled blockchain developer block.

Bitmain has surpassed Spreadtrum Communications, a 17-year-old company, as the second largest integrated circuit design maker in China, according to the investor prospectus.

As of December 2017, Bitmain matched Huawei HiSilicon in 16 nanometer chip sales, while Taiwan Semiconductor Manufacturing Company, Ltd., the world's largest semiconductor company to consumer goods vendors like Apple, Inc., supplied a greater quantity of 10 nanometer chips for Bitmain than the Kirin 970 chip equivalent for Huawei HiSilicon.

Bitmain is betting that neural network machine learning methods will heighten processing capacity in graphics chips for cryptocurrency and non-cryptocurrency applications alike, as with the BM1680 processor-based tensor computing card, deep learning accelerating card and intelligent server unit.