Canaan Creative completes new round of financing with a valuation of billions of dollars

On March 11, an insider told a reporter from the Securities Times that the chip company Canaan Creative had just completed a round of financing worth hundreds of millions of dollars. After this round of financing, the valuation reached billions of dollars.

Canaan Creative is well-known and is known as the world's second largest Bitcoin mining machine manufacturer and an emerging artificial intelligence edge computing chip manufacturer. According to the official website, Canaan Creative was founded in 2013 and was introduced to Hangzhou from Beijing Zhongguancun by the Hangzhou Branch of Tsinghua Yangtze River Delta Research Institute in 2015. Canaan Creative is a global service provider of integrated circuit solutions and chip design independent research and development, a world leader in repetitive computing, and the world's first 7nm chip research and development and mass production organization.

Previously, Canaan Creative had been eager to enter the capital market, but its road to listing was not smooth. In June 2016, Luyitong (300423) announced that it planned to acquire 100% of Canaan Creative's equity for a total price of 3.06 billion yuan, but the Shenzhen Stock Exchange sent letters of inquiry many times, believing that the acquisition was suspected of "backdoor listing". Three months later, Luyitong announced the termination of the major asset restructuring plan to purchase 100% of Canaan Creative's equity for some reason.

A year later, Canaan Creative moved to the New Third Board, but due to the particularity of the company's business, this application was met with three rounds of feedback and inquiries from the National Equities Exchange and Quotations and securities firms. In the end, Canaan Creative voluntarily gave up listing on the New Third Board.

In May 2018, Canaan Creative submitted a prospectus to the Hong Kong Stock Exchange after failing to go public through backdoor listing and listing on the New Third Board. The prospectus shows that from 2015 to 2017, Canaan Creative's mining machine sales have grown by leaps and bounds, with sales of 9,727 units, 93,800 units and 295,000 units respectively, with revenue of 47.7 million yuan, 316 million yuan and 1.308 billion yuan respectively in the same period; net profit was 15.11 million yuan, 52.54 million yuan and 361 million yuan respectively. However, in November 2018, information on the official website of the Hong Kong Stock Exchange showed that Canaan Creative's Hong Kong IPO application had expired six months after submission. In this regard, the market speculated that it might be related to the upcoming launch of the domestic Science and Technology Innovation Board, which stimulated Canaan Creative's enthusiasm to join the game.

On January 30 this year, Canaan's business registration information changed, and Liu Xiangfu, one of the three co-founders, was no longer on the company's board of directors. This change attracted attention from the outside world. According to media reports citing insiders, Liu Xiangfu's departure may be due to differences with the company's overall strategic development: Canaan's management hopes to continue to build the company into a manufacturer focused on cryptocurrency mining and artificial intelligence chips. Unlike its competitor Bitmain, Canaan does not mine or operate mining pools, and the leadership hopes to maintain this status in order to focus more on the company's core capabilities.

In terms of market value, after this round of financing, Canaan's valuation has reached several billion US dollars, but the exact amount is unknown. Previously, in the "Hurun Greater China Unicorn Index for the Second Quarter of 2018" released by Hurun Research Institute, Canaan's valuation was RMB 20 billion; in terms of revenue, Canaan's sales revenue in 2017 exceeded RMB 1.3 billion, and its revenue in 2018 is unknown, but market rumors have reached RMB 3 billion. According to the list of 83 key companies to be listed in the "Phoenix Action" plan released by the Hangzhou Financial Office in October last year, Canaan was among them.