Crypto’s 32-year-old billionaire mining king
Jihan Wu pursues an expansion that may eventually lead to an initial public offering
With his baby face, eyeglasses and go-to outfit of T-shirt, jeans and sneakers, Jihan Wu looks more like a geeky teenager than a self-made billionaire.
But thanks to an early foray into cryptocurrencies, the softspoken 32-year-old is sitting on what may be one of the industry’s largest fortunes.
Wu runs Bitmain Technologies Ltd., the world’s dominant producer of cryptocurrency mining chips. The Chinese company has been shrouded in secrecy since its founding five years ago, but Wu is gradually lifting the veil — and revealing clues about his personal wealth — as he pursues an expansion beyond the cryptosphere that may eventually lead to an initial public offering.
In an interview with Bloomberg News, Wu said Bitmain booked US$2.5 billion of revenue last year and that he and cofounder Micree Zhan together own about 60 per cent of the business. While Bitmain has few direct comparables, applying a multiple similar to that of publicly traded chipmakers such as Nvidia and MediaTek would give the company a valuation of about $8.8 billion. That would make the co-founders’ holdings worth a combined $5.3 billion, according to the Bloomberg Billionaires Index.
Wu, who said he has a smaller stake than Zhan, declined to share details of his net worth, his cryptocurrency holdings and his other personal investments. He has previously said Bitmain is worth $12 billion.
Given the uncertainty surrounding digital assets and the limited public information about Bitmain, any estimate of the Beijing-based company’s value — and its owners’ wealth — inevitably involves a lot of guesswork.
But that could be about to change. An IPO would not only open Bitmain’s books to the world, it would also allow the stock market to assign the company a value in real time. While Wu said he has no specific plans at the moment, he’s open to a listing in Hong Kong — or in an overseas market with U.S. dollardenominated shares — because it would give early investors including Sequoia Capital and IDG Capital a chance to cash out.
A public share sale would be a landmark event for both Bitmain and the broader crypto industry, which is slowly emerging from the shadows. Miners, developers and venture capitalists are opting for more transparency as they try to placate wary regulators and prove that last year’s boom in digital assets was more than just a flash in the pan.
An IPO would also help boost Bitmain’s profile as the company branches out into areas including artificial intelligence, a field that enjoys the full-throated backing of Chinese authorities, unlike cryptocurrencies.
“The challenge is advancing our technology beyond what we’ve already achieved,” Wu said in an interview at the Four Seasons Hotel in Hong Kong.
One of Bitmain’s biggest competitors, Canaan Inc., has already filed for a Hong Kong IPO that people with knowledge of the matter said could raise about $1 billion. Bitmain’s 2017 revenue was about twelve times that of Canaan’s.
Bitmain controls as much as 80 per cent of the market for crypto mining gear, according to a February report from Sanford C. Bernstein & Co., whose most conservative estimate of the company’s operating profit is similar to that of Nvidia’s. Bitmain’s Antminers — server-sized boxes filled with dozens or hundreds of identical high-powered chips — sell for a few hundred to a few thousand dollars and are typically bought in bulk by professional operators with access to cheap electricity.
A Bitmain offering would garner plenty of attention from Hong Kong investors who lack compelling options to bet on China’s nascent chip industry, according to Kevin Wang, an analyst at Mizuho Securities Asia Ltd.