Spondoolies-Tech Takes Aim at BitFury With $5 Million Funding Round

Spondoolies-Tech has raised $5m from a pool of both new and existing investors as part of its ongoing Series B funding round.

Participants in the round included Agile Wings, BRM Group and Genesis Partners, as well as a group of angel investors that featured entrepreneur Olivier Janssens and Aleph partner Eden Shochat.

Speaking to CoinDesk, Spondoolies-Tech CEO Guy Corem indicated that his company intends to use the funds to fuel its third-, fourth- and fifth-generation ASIC development and rival what it views as its main international competitor, BitFury.

Corem seeks to portray Spondoolies-Tech as more welcoming to the Western world than its larger competitor, who he criticizes for basing its mining center operations in regions that could lead the industry to perhaps be portrayed in a less favorable light.

Corem told CoinDesk:

"We consider ourself part of the Western world and we think we have the technology to beat BitFury and the other players in this field."

The Israel-based bitcoin mining manufacturing firm is one of the oldest in the industry, having raised its first round of venture funding in August 2013. Spondoolies-Tech has so far maintained its reputation in a sector of the industry that has been increasingly categorized by customer complaints and legal action.

This reputation was evoked by Janssens, who said that he believes Spondoolies-Tech has the necessary tools to succeed long term.

"I am convinced they will be one of the few players that will remain, when the mining hardware consolidation takes place over the next years," he said.

The latest funding brings Spondoolies-Tech's total to-date funding to $11m. BitFury, by comparison, has raised $40m in two funding rounds this year.

Powering 30% of the network

With the new funding, Corem is also setting ambitious goals for his company and its upcoming round of new equipment.

"Our goal is to get to 0.05 W/GHs, 0.03 $/GHs miners by mid 2015 and power more than 30% of the bitcoin network," Corem explained, adding that he believes these figures will help the company match its rival firms in the US and China.

Spondoolies-Tech is looking to release a 28nm ASIC, as well as two custom 16nm ASICs, by the second half of 2015, the total costs of which will be north of $7m, he estimated.

Corem went on to cite custom design on the transistor level of its chips as a key feature that would allow the company to reduce the power consumption and overall cost associated with its offerings.

"We will be the leader in terms of power efficiency," he added.

International partners needed

Corem said that the funding will also help Spondoolies-Tech reach out to new partners that can help it grow its operations worldwide, as it is currently conducting its own mining operation on a limited scale.

According to Corem, the company is aiming to emulate the distributed model evoked by US-based MegaBigPower earlier this year, which allows interested entreprenuers to open up mining facilities under its franchise model.

"We don't want to actively operate the mine," Corem explained. "We would provide a guidebook with what needs to be done to create a facility in a way that will allow the customer to use our various generations and split profit off it."

These partnerships, Corem suggested, may prove essential given that Spondoolies-Tech's customer base increasingly consists of enterprise-level clients.

Corem estimates that less than 20% of his company's sales are direct to consumers, a figure that suggests the recent rise of industrial-scale mining is having an impact on this market.

Images via Spondoolies-Tech