Canaan, one of the biggest ASIC mining chip manufacturers in China, has closed another round of funding. A Chinese financial news outlet, Securities Times, reported that the company, known for its Avalon line of mining devices, has raised “several hundred million U.S. dollars”. The firm is now valued at over $1 billion.
The funding round follows Canaan’s plans to go public in the United States. The Beijing-based company initially applied to list on the Hong Kong Stock Exchange (HKSE) but put those plans off in November last year after its listing application expired. The HKSE was reluctant to approve an IPO from a cryptocurrency firm, despite Canaan’s joint sponsors of the IPO including investment banks Credit Suisse, CMB International Capital, Deutsche Bank and Morgan Stanley.
HKSE Unwilling To Approve Crypto IPOs
Bitmain, the world’s leading crypto mining chipmaker and a major competitor to Canaan, also attempted to go public in Hong Kong. But they faced the same issues with HKSE unwilling to approve a crypto company’s IPO.
Frank Bi from Hong Kong Law Firm, Ashurst, said that HKEX would “remain cautious due to lack of sustainable business models from the mining industry. They have no grounds to reject applications, but the platform is dragging cases until they have confidence in the virtual currency sector. However, if the markets continue to rise, HKEX will have to approve and allow companies to trade”.
There is speculation that Canaan is looking to expand into the artificial intelligence and that this could be the reason behind the funding. However, Canaan has not revealed how it plans to utilize the funds. Securities Times claim that their anonymous sources are close to the inner workings of the company, but there is no official statement from Canaan as yet.