Canaan Files for $400 Million IPO in New York in Another Attempt

Canaan has applied to list on the Nasdaq Global Select Market under the symbol “CAN.”

Anthony Russo
    Oct 29, 2019 12:00 PM  PT
Canaan Files for $400 Million IPO in New York in Another Attempt
author: Anthony Russo   

Canaan Inc., which makes bitcoin mining equipment, has applied for an a $400 million initial public offering in New York.

The company, based in Hangzhou, has filed its preliminary prospectus with the U.S. Securities and Exchange Commission on Monday in its third attempt at an IPO. As reported by Reuters, Canaan previously made attempts to become publicly listed in mainland China and Hong Kong.

Launched in 2013, Canaan operates as the second-largest developer and manufacturer of bitcoin mining machines globally, according to its filing. On its website, the company also calls itself the world's leading supplier of AI & blockchain chips and system solutions. It was formally known as Canaan Creative Information Technology Co. Ltd.

The company said its revenue in the six months through June plummeted to $42.1 million, down 85% year-over-year. Canaan also suffered a net loss of $48.2 million, in contrast to net income of $32.8 million a year ago. In its filing, Canaan attributed the weakened performance to a decline in the average selling price of its bitcoin mining machines.

Last year, Cannan unveiled its first 7nm mining chip at a press conference in Hangzhou.

In 2018, the global IC market was worth $401.6 billion, Canaan said in its prospectus, citing research by market analytics firm Frost & Sullivan. The industry has sustained growth, particularly in the fabless IC design sector, as sales soared to $38.5 billion in 2018, facing a compound annual growth rate (CAGR) of 26% from 2014, the report said. The IC design industry is projected to reach $79.4 billion by 2023, representing CAGR of 16%.

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Canaan said it intends to use the proceeds from its IPO for research and development of AI algorithms and applications, along with blockchain algorithms and applications. It also plans to invest in its expansion of AI and blockchain business globally, supply chain optimization and to repay debts, as well as in other general corporate purposes, according to the prospectus.

Underwriters and managers on Canaan's IPO are Credit Suisse Securities (USA) LLC, Citigroup Global Markets Inc., China Renaissance Securities (Hong Kong) Ltd., CMB International Capital Ltd., Galaxy Digital Advisors LLC, Huatai Financial Holdings (Hong Kong) Ltd. and Tiger Brokers (NZ) Ltd.

Canaan expects to list on the Nasdaq Global Select Market under the symbol "CAN."