Australian Data Center Startup Arkon Expands to U.S. With $26M in Fresh Funding

The company, which operates data centers that host bitcoin mining equipment, also raised $26 million in fresh capital from Sandton Capital Partners, which it intends to use to fund an "aggressive expansion" into North America, according to an announcement shared with CoinDesk on Tuesday. That's on top of the $28 million it raised in November, when it bought Hydrokraft AS, a renewable energy-based data center in Norway.

The acquisition is likely to be "the first of several" over the next year, CEO Joshua Payne said in the statement.

The data center in Ohio is designed for a capacity of 100 megawatts (MW) and is expected to add up to 3.3 exahash per second (EH/s) to the firm's hashrate by the end of 2023. Arkon said it hopes the facility will offer a predictable revenue stream by providing server hosting services to bitcoin mining firms.

Bitcoin mining firms felt the pain of the last year's crypto bear market as they were squeezed between falling valuations and high electricity costs, with some firms going bankrupt as a result. Further uncertainty lies ahead with bitcoin's next halving, now less than a year away, which will reduce rewards for mining blocks, and so challenge firms' profit margins further.

“Raising capital in the current climate, particularly amidst a crypto downturn and increasing regulatory scrutiny, was indeed a challenge," Payne said. "However, the uncertain market landscape also presents very well priced buying opportunities for those that are able to navigate the storm and protect the downside."

Read More: Excavating the Truth Around the Bitcoin Mining Discourse

UPDATE (June 20, 10:50 UTC): Amends Arkon description in the second paragraph from being a firm that mines bitcoin to one that runs data centers that host mining equipment.