Canaan Raises $25 Million via Sales of Preferred Shares

The net proceeds are intended for R&D, scaling product sales, and covering corporate overhead.

Chinese bitcoin miner manufacturer Canaan has raised $25 million via equity financing to double down on product research and development.

Canaan said in a filing on Wednesday that it closed the first tranche of a transaction entered on Nov. 27, under which it would raise up to $125 million by issuing Series A convertible preferred shares to an unnamed institutional buyer.

Canaan indicated in a previous filing that it plans to use the net proceeds for R&D, scaling product sales, and covering corporate overhead.

In addition to the issuance of preferred shares, Canaan has entered into an at-the-market agreement with B. Riley, which will act as a sales agent to help Canaan raise up to $68 million via stock offerings.

blocksbridge leaderboard banner

Canaan initially intended to raise up to $148 million via the ATM, according to its prospectus on Nov. 10, but later revised the upper limit to $68 million.

As previously reported, Canaan’s product revenue dropped by 48% in Q3 on a quarter-over-quarter basis, citing “increased pricing competition and a noticeable softening in purchasing power on the demand front.”

Although top mining companies in North America have committed over $1.2 billion in miner equipment year-to-date, less than 5% of the purchases identified by TheMinerMag were for Canaan’s Avalon miners.

Despite being the company that shipped the first-ever bitcoin ASIC in 2013, the market share of Canaan hardware products has been significantly eroded by Bitmain and MicroBT over the past eight years.

Screen Shot 2023 12 13 at 7.41.56 PM