Israel-based bitcoin mining hardware manufacturer Spondoolies-Tech may become the first such company available for investment on publicly traded markets, following a letter of intent with Bitcoin Shop for a merger between the two companies.
Recently, Bitcoin Shop had become a key client of Spondoolies, making sizeable purchases of hardware to rapidly ramp up its mining capacity. Bitcoin Shop has sought to diversify into multiple areas of the Bitcoin economy, focusing less on its envisioned bitcoin-based e-commerce platform. Mining bitcoin has now become its main operation, the company describing itself as “engaged in transaction verification services.”
Charles Allen, Bitcoin Shop’s CEO, stated that its key goal in 2014 was to form the right partnerships. Working together, the companies would combine their expertise in developing and operating the hardware. Allen elaborated:
“As a collective, our next objective will be to complete the development and production of a next generation chip to drive our transaction verification services business and to generate revenue from the combination.”
Speaking to Finance Magnates, he clarified that while the companies would continue to specialize in their respective areas of expertise, they would “work together on all decisions.”
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For Spondoolies, the deal is the latest of a number of achievements that have helped the company become one of the most prominent mining hardware manufacturers in the world. Late last year, the startup secured $5 million in Series B funding, bringing total investment to $11 million. It has since been forming strategic relationships with several other players in the industry.
Spondoolies CEO Guy Corem indicated that the partnership may help the companies move beyond mining. He commented:
“The synergy between the teams is amazing. I have the utmost confidence that together we will build a very successful and prosperous company by growing and expanding our business beyond bitcoin mining equipment.”
Bitcoin Shop too just recently raised $2.3 million, a positive sign for investors after the company undertook cost cutting measures late last year.
Completion of the deal remains subject to the completion of due diligence.
Shares in Bitcoin Shop, traded on the OTC markets, opened higher by over 10% but have since given up most of their gains.