Phoenix Puts UAE On Bitcoin Mining Map
Middle East Bitcoin Miner Raises $370 Million in IPO
UAE-based bitcoin mining company Phoenix grabbed headlines this week with the announcement of its oversubscribed $370 million IPO on the Abu Dhabi Stock Exchange.
Ahead of the public raise, Phoenix published a 170-page IPO prospectus, shedding light on its operations, current scale, and financial statements covering 2021, 2022, and the first nine months of 2023.
As the financial statements lack a searchable format, we have extracted essential figures to offer a swift glimpse into Phoenix Group's business below. The main takeaway is that Phoenix appears so far to be more of a bitcoin mining hardware distributor than a proprietary miner or a machine hosting business. It will be interesting to see how it further diversifies the business streams.
Shareholder structure
In the IPO, Phoenix put up 907 million shares for sale, with 60 million shares allocated to retail investors and 847 million shares for professional investors. According to Phoenix, retail and professional investors showed strong interest, oversubscribing by 180 times and 22 times, respectively—that signals a burgeoning enthusiasm for bitcoin mining in the region.
Phoenix's board comprises five individuals, three of whom will collectively control 64.89% post-IPO — namely Dahalan (42.02%), Alizadehfard (12.68%), and Munaf Ali (10.19%).
Business Overview
Phoenix Group segments its operations into three primary areas: proprietary bitcoin mining, colocation hosting, and ASIC machine distribution. Additionally, it holds a minority stake in the crypto investment platform, M2. Key highlights from the prospectus include:
Team size: 191 employees, with 157 based in the UAE.
Hashrate capacity: 13.9 EH/s
Proprietary operating hashrate: Not disclosed
North America footprint: 100 MW with an additional 115 MW in the near future.
Middle East footprint: 250 MW in Abu Dhabi and 150 MW in Oman, the latter via a partnership with Green Data City.
Exclusive distribution of WhatsMiner in UAE, GCC, Egypt, Turkey, and Kenya.
For the full fiscal year of 2023, Phoenix projected a total revenue of $247 million and an EBITDA of $172 million.
Despite an emphasis on power capacity and infrastructure, Phoenix's revenue stream seems reliant primarily on hardware sales, namely Antminers and WhatsMiners. It also has distribution rights for certain bitcoin cold wallet brands but revenue from that is relatively quite small.
For instance, Phoenix World Electronics, the group's computer hardware trading subsidiary, contributed $720 million to 2022 revenues, constituting 95.44%. Approximately $715 million of this amount stemmed from sales through distribution agreements with Bitmain and MicroBT, boasting a gross margin of around 22%.
Notably, Phoenix mentioned that sales in 2023 remained robust but did not provide a breakdown of hardware sales for the first nine months of 2023, like the detailed disclosures it provided for 2021 and 2022.
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