Canaan Begins Process For Large U.S. IPO Attempt – Canaan (Pending:CAN)

Quick Take

Canaan (CAN) has filed to raise gross proceeds of up to $400 million from a U.S. IPO, according to an F-1 registration statement.

The firm provides cryptocurrency mining hardware and an edge computing AI chip.

CAN has been subject to the severe ups and downs of the cryptocurrency industry and doesn’t have significant sales for its AI chips. Management says its AI development program is ‘crucial’ to its ability to diversify its revenue sources.

I’ll provide an update when we learn more about the IPO’s pricing and valuation assumptions.

Company & Technology

Huangzhou, China-based Canaan was founded in 2013 with an initial focus on developing ASIC applications for Bitcoin mining under the brand Avalon Miner and has since expanded its portfolio with the Kendryte K210 chip.

Management is headed by founder and CEO Nangeng Zhang, who was previously an assistant researcher at the Beijing Remote Sensing and Communication Technology Institution.

The company is the second-largest designer and manufacturer of Bitcoin mining hardware globally in terms of total computing power sold in H1 2019, accounting for 21.9% of the combined computing power of all the Bitcoin mining machines sold globally, as per data from Frost & Sullivan.

Kendryte K210, also referred to as ‘Kendryte AI’ is an Artificial Intelligence [AI] edge computing chip based on the Risk-V open-source hardware instruction set architecture that has been backed by companies like Alibaba (BABA), Google (GOOG) (NASDAQ:GOOGL), Samsung (KRX:005930), Qualcomm (QCOM), and Antmicro.

Investors in Canaan have included Tunlan Investments, Jinjiang International, and Baopu Asset Management. Source: Crunchbase

Customer Acquisition

The company has an ‘AI marketing’ team and participates in industry associations, including Zhejiang Software Industry Association, the Zhejiang Blockchain Technology Application Association, the Chinese Private Technology Entrepreneur Association, the Hangzhou Association of Enterprises…

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