Ebang eyes financial service pivot with New Zealand firm buy

Mining equipment manufacturer Ebang has announced an interest in acquiring a New Zealand financial company and to set up a digital asset financial services company. The Chinese company is following through with a pledge it made on its IPO prospectus to become a fully fledged digital currency financial services provider.

Ebang announced the latest move in a press release, revealing that it had entered into an Expression of Interest Tender Letter to “acquire the 100% shares a licensed New Zealand-based financial company that offers wholesale and generic financial broker, and wealth management services to establish a local digital asset financial service platform.”

Founded in 2014 by its chairman and CEO Dong Hu, the company has grown to become one of the top 4 mining equipment manufacturers, along with market leader Bitmain, Canaan and MicroBT. Ebang’s mining equipment first hit the market in 2016 and in the two years that followed, the company recorded massive growth. As a result, it filed for an IPO in the Hong Kong Stock Exchange, seeking to raise as much as $1 billion. However, the IPO plans fell through.

The company refiled in the U.S. and had its IPO on the Nasdaq Global Markets in June 2020.

With the latest acquisition plans, Ebang is delivering on its pledge to launch a comprehensive blockchain-enabled financial business that captures the growth opportunity along the entire value chain, CEO Hu stated.

He added, “Leveraging our longstanding expertise in the blockchain technology and our recent expansions to Singapore, Canada and New Zealand, we have taken a giant stride toward our goal to build a fully-licensed, Internet-based trading platform that provides professional, convenient and innovative trading services.”

Ebang pointed out that the acquisition is not yet a done deal and is subject to negotiations between the relevant parties as well as approvals from the relevant authorities.

With the expansion, Ebang will be looking to diversify from its core income stream which lies in mining equipment sales. As it revealed in its IPO prospectus, its revenue has been declining for the past three years. In 2018, it recorded $319 million in revenue but in the following year, it saw a 65% drop to rake in $109 million in revenue. In Q1 this year, it recorded a $2.5 million loss in light of increased competition and a drop in digital currency prices.

See also: Jerry Chan’s presentation at CoinGeek Live 2020 on The Shift from Bitcoin “Miners” to “Transaction Processors”.

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