Bitcoin mining venture Arkon Energy has raised $2.6 million in a pre-seed round.
The round was led by blockchain investment firm Kestrel0x1, alongside strategic investors, such as trade services and renewable energy products provider, Linked Group Services, as well as other angel investors.
The startup is using the funds to scale its bitcoin mining operations via a two-year, 44 megawatt (MW) – enough power for around 14,000 homes – renewable energy project pipeline taking on larger competitors such as Mawson Infrastructure and Canada’s Iris Energy in the sustainable “green” crypto mining space.
Sydney-based co-founder and COO Joshua Payne said Arkon Energy has built the pipeline across four project partnerships to be deployed over 18-24 months, using low-cost renewable energy and immersion cooling.
Payne founder Arkon with Gold Coast-based Nathan Townsend. His previous venture was the NYSE-listed special purpose acquisition company, Battery Future Acquisition Corp, which raised US$345 million at an IPO in December.
He said using low-cost, base-load renewable energy to mine Bitcoin has the potential to increase profits five-fold.
“Due to the grid oversupply issues causing the cost of power to run negative during the day, renewable energy generation asset owners must consider alternative sources of electricity monetisation to remain profitable and competitive,” he said.
“Most large renewable companies are already exploring the use of battery storage to store energy and deliver it to the grid on-peak for additional profit. But this only provides a small window of opportunity during the day to benefit from high power prices.
“The advantage of mining Bitcoin is that you are storing energy in money, which can either be immediately converted back to Australian Dollars at a five-times greater profit margin, or held for long-term price appreciation.”
With Sydney-based Mawson Nasdaq-listed now looking to take Arkon Energy public within 24-months.