Bitcoin miner, CleanSpark (CLSK), has secured USD 35 million in equipment financing. The raise is backed by 3,336 new S19 J Pro Bitcoin miners by Trinity Capital (TRIN), a renowned provider of venture debt financing.
According to Henderson, a Nevanda-based sustainable miner, the proceeds from the financing will be used for capital growth. Gary Vecchiarelli, the chief financial officer of CleanSpark, said that just like they had indicated in the quarter-one earnings call, debt capital is one of the lowest costs of capital available for the company. He added that they target to continue getting non-dilutive capital to finance growth needs for the company.
In February, CleanSpark’s earnings indicated that it preferred to raise capital through rig-backed debt and the company was in talks with the lenders. Other options which were also considered to be on the table included monetizing Bitcoin held by the company.
Loans with Specialized Bitcoin Miners as Collateral
This financing is unveiled when miners are trying to get creative with financing as capital markets appear reluctant because of the poor Bitcoin performance this year. Using ASICS, specialized BTC mining computers, as collateral has become a common practice for funding growth plans.
According to Mas Nakachi, the head of crypto finance firm XBTO’S mining operations, most financing options for miners changed fundamentally in 2021. He added that miners are now starting to get bold and more comfortable with equipment-financing. XBTO offers financing to miners using asset-backed loans. It also allows the use of Bitcoin as collateral.
In a more recent case, Iris Energy (IREN), an Australian Bitcoin miner, indicated that it secured USD 71 million for equipment financing from NYDIG with a 25-month term and 11% interest. The loan is backed by 19,800 Bitmain S19j Pro Miners. NYDIG also loaned USD 81.4 million in S19 J Pro-backed loan to Greenidge Generation (GREE).
Ryan Little, the managing director of equipment financing at Trinity Capital said that they are excited to get into partnership with CleanSpark, which is on a mission to help make mining more responsible.