Miami-based startup Pipe has launched ‘mine now, pay later,’ the bitcoin mining industry’s first alternative financing solution. Pipe’s new API is set to power financing options for the recurring revenue industry.
Pipe, the trading platform for recurring revenues, has launched a ‘mine now, pay later’ financing offering for bitcoin mining hardware and hosting companies.
This offering is set to allow bitcoin mining hardware companies to offer payment terms to their customers on mining equipment and services.
In conjunction with this launch, the platform has also released the Pipe API that allows any company with a recurring revenue business model to sync to the Pipe trading platform to get up-front capital for their future recurring revenue streams.
The introduction of these two initiatives further establishes the building blocks for embedded finance and access to the capital markets for any business with recurring revenue.
Bitcoin mining is performed through the use of mining hardware called an application-specific integrated circuit (ASIC); capable of solving computational math problems at break-neck speed.
Currently, ASICs cost upwards of $10,000 apiece, and the price is climbing steadily due to supply constraints and the exceptional return on investment that mining provides.
To date, there have been very limited financing options for these devices by traditional financial institutions.
With the introduction of its latest mine now pay later solution, Pipe is providing access to the capital markets for bitcoin mining hardware companies and other industries with innovative business models for which traditional finance has not historically provided support.
“The launch of Pipe’s bitcoin mining solution and the Pipe API is a clear sign of our intention to shine the light on markets and businesses that have flown under the radar of traditional debt and equity financing,” says Harry Hurst, co-founder and co-CEO of Pipe.
“2021 was a watershed year for Pipe and the recurring revenue asset class, and by starting 2022 with initiatives like these, we are demonstrating our commitment to making Pipe the platform of platforms for any company with recurring revenue looking to grow their business on their terms.”
Compass Mining, the platform for bitcoin mining hardware and hosting, has been working with Pipe on the ‘mine now, pay later’ offering for several months and is the first company to broadly offer it to its customer base.
Customers who purchase Compass Mining’s bitcoin mining equipment can now pay for managed hosting services in monthly instalments and Compass Mining can trade these contracts on the Pipe platform to get fully paid upfront.
“We believe everyone should be able to mine bitcoin, and Pipe’s ‘mine now, pay later’ is a big step in this journey,” says Whit Gibbs, CEO of Compass Mining. “Together with Pipe, we are accelerating the growth of bitcoin mining by democratising access to the critical financing options that traditional banking institutions have ignored.”
The Pipe API will enable companies to transition their recurring revenue into up-front capital, with companies in various markets having to test the beta version of the API. This bitcoin mining and hosting vertical is an example of how APIs can help extend access to financing for less traditional industries.