Pipe Introduces Alternative Financing Product for Bitcoin Miners

The company worked with Compass Mining for several months before launching the product.Read MoreFeedzy

Pipe, the trading platform and technology company that was valued at $2 billion last year, is launching a new, alternative financing product for bitcoin mining hardware and hosting companies with recurring revenue.

The program, called “mine now, pay later,” will work as an alternative to traditional means of financing such as equity or debt, which are expensive for the companies and their shareholders.

“We’ve created a trading platform that allows companies to sell recurring revenue stream generating products and services to institutional investors,” Harry Hurst, the co-founder and co-CEO of Pipe, said in an interview with CoinDesk.

The buyers of these contracts are institutional investors, including banks, hedge funds, pension funds and family offices, that have a fixed-income mandate and are looking for recurring payout generating assets, Hurst said.

A company signs contracts with its customers for a recurring payment schedule, and then puts those contracts into Pipe’s platform for trading, where investors will buy the contracts. In turn, the transaction becomes an instant source of funding for the company, which it can use to fund its growth without diluting the shareholders by offering equity or locking in an expensive debt facility.

“The financing solution is a little bit like hardware financing, but much more efficient because it’s on a trading platform and diversified,” Hurst explained.

Pipe earns a commission on trades that get executed through its platform. The commission is up to 1% and varies depending on the trading volume, Hurst said.

Pipe has been working for several months with bitcoin mining service provider Compass Mining, which is the first company to broadly offer this new form of financing.

The funding alternative comes as cryptocurrency and broader markets have retreated from their peaks last year, dampening euphoria among investors. In such a market, access to capital via traditional means has become harder and more expensive for bitcoin mining companies.

“Together with Pipe, we are accelerating the growth of bitcoin mining by democratizing access to the critical financing options that traditional banking institutions have ignored,” said Compass CEO Whit Gibbs in a statement.


The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Leave a Reply

Your email address will not be published. Required fields are marked *