Vancouver cryptocurrency mining company DMG Blockchain Solutions Inc. has raised new capital with the recent announcement of a completion of a $28 million funding round. The financing will help DMG establish its bitcoin mining and mining-as-a-service operations within the newly emergent field of blockchain tech.
Led by investment dealers Canaccord Genuity Corp. and Paradigm Capital, the funding includes the sale of 35 million subscription receipts at the price of $0.80 each for aggregate proceeds of $28 million. The closing was announced by shell company Aim Explorations Ltd. (TSX-V:AXN.H), which in September 2017 issued a letter of intent for a qualifying transaction to acquire all of DMG’s shares.
Aim Explorations said in September that interest in DMG caused an amendment to an early financing round, which was upped from $3 million to $4.2 million based on “significant demand.” AIM is led by Geoff Balderson who also serves as director for a number of mining companies including Canadian International Minerals Inc., Argentum Silver Corp. and Goldeneye Resources Corp.
DMG had earlier this month announced the launch of its new mining-as-a-service platform, which is aimed at Japanese retail investors in cryptocurrencies. The company says it’s set to purchase $3 million worth of hardware related to its network of cryptocurrency investors in Japan, which has emerged as a driving force in digital currency trading.
“By enabling our customers to mine their own bitcoin in a clear and transparent manner, I believe we have the right offering at the right time,” said DMG CEO Dan Reitzik in a press release. “The Japanese demand remains strong and we plan to address the broader global market in short order.”
Incorporated on September 7, 2016, DMG dubs itself a “full service blockchain and cryptocurrency company,” offering cryptocurrency wallets and software for global digital currency conversions and transactions, as well as a developer of payment and Internet of Things platforms based on blockchain’s distributed ledger technology.
“DMG believes its smart contract-based blockchain technology can be used to monetize the Internet of Things (IoT), enabling intelligent Internet-connected autonomous devices to securely transmit and transact with low transaction fees for services executed by the network,” writes the company in a statement.
The crypto-mining field is getting more crowded as companies push to take advantage of investor interest in currency mining, itself boosted by the meteoric rise this past year in the price of cryptocurrencies like Bitcoin and Ethereum’s Ether currency.
One DMG director is Sheldon Bennett, who for three years led the Canadian arm of cryptocurrency mining giant BitFury. Recently, BitFury announced a partnership with new mining company Hut 8, a Vancouver currency miner which was given exclusive rights to own and operate BitFury’s data centres across North America, taking control of 22 of BitFury’s operations which altogether consume 24.2 MW of computing power.
Earlier this month, Hut 8 announced it had raised $38 million in institutional capital in a private placement.
Disclosure: DMG Blockchain Solutions is a sponsor of Cantech Letter
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