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Cyberian Mine

We help cryptominers to reach cheap renewable energy sources

Germany
Market: Internet and IT, Services, Blockchain, Crypto currency
Stage of the project: Operating business

Date of last change: 24.09.2020
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Idea

We are providing transparent access to unique miner-hosting conditions of Siberia to beginners and professionals, by providing pre-installed equipment in our Siberian facilities along with a long-term hosting contract.
It is cheap and green since it's using immense hydropower stations of Siberia and natural cooling.
We make industrial scale mining conditions accessible to individual miners by using our unique automation platform.
We make it safe and compliant with our German-Russian legal framework, created with the help of KPMG.

Current Status

In public space since 2018. Closed angel round in 2018, then Seed in 2019. Raised 615000 Euro in total from 11 shareholders apart from 2 founders.

Revenue in 2019 was ~1.900.000 Euro.
This summer launched new automated platform to allow us to scale the previous result.

Currently we are sustainable, earning enough to stay net positive, for rapid growth we might use investments.

Market

Blockchain-enthusiasts, crypto-miners, individual investors, both beginners and professionals.

Problem or Opportunity

Access to abundance of underused cheap green sustainable energy in distant regions.

Solution (product or service)

Unique technology and robust legal framework for safe, transparent and ethical investments into crypto-mining.

Competitors

Cloud mining - illegal in many jurisdiction, no transparency, often ponzi or scam.
Industrial mining farms - extremely high barrier of entry.

Advantages or differentiators

1. Fully automated processes - fr om onboarding to mining payouts.
2. Unique Hybrid Mining tech (Guaranteed Hash Rate) - allowing to compensate lacking hash rate when unit is failing or underperforming. No headache or risks for clients. Also it adds options to increase margin on hosting (MRR) older generation of miners, since its more expensive hash rate can be replaced by that of modern ones.
2. Transparency and auditability - physical asset with a serial number behind each mining unit.
3. Commitment to full compliance and legal framework, built with help of KPMG allows reimbursement of 20% VAT on electronic services, provided to customers outside of Russia.
4. Shared miners - allows to break down miner into manageable units, lowering barriers of entry, keeping the same efficiency of miner.
5. Marketplace, wh ere users can sell their miners to each other (easy exit for users; more engagement for customers; more options for customers).

Finance

Three revenue streams:
1. Equipment selling (One-time 10%)
2. Recurring long-term Hosting revenue (30-40% price margin Hosting+Energy).
3. Self-mining. If miners are sold quickly, we are happy to gain the long-term hosting revenue and increase our fleet. If sales are slow (which sometimes is the case, depending on market) we mine for ourselves, which brings 2-5% of unit's cost per month.

COGS:
1. Initial purchase of mining equipment.
2. Outsourced hosting + energy to industrial mining facilities.
3. 1 and 2.

Business model

1. We purchase and preinstall miners.
2. Mine until sold.
3. When sold - it generates long-term MRR.
4. Repeat 1..3 and grow the fleet.

Main KPI is Total power of units hosted, kWh (affects MRR).

The worst-case scenario is as efficient as of yet another mining farm. The best-case scenario implies constant growth of MRR with 99% retention.

Money will be spent on

Depends on reached amount.
Up to 500k
30% Hardware, 50% Growth (marketing), 20% Development.

800k-1mio
50% own facility, 15% Hardware, 25% Growth (marketing), 10% Development

Offer for investor

Convertible note, SAFE, or equity with adding to German commercial register (notary meeting needed).

Hard-cap 1000000 Eur.
Minimum 150k Euro
5000000 pre-money valuation.

Ways of exit:
1. Yearly dividends (yes, we are earning already).
2. Series A in 2022 at 22-25 millions.

Risks

1. Political risks - Ban of mining in Russia (latest legislation fortunately allows mining in full, crypto is banned, our framework fits perfectly, since crypto is handled outside of Russia).
2. Bitcoin Market Risks - volatility and bear market can make initial sales difficult at some points. Our model was robust enough to let us survive through 2 cryptowinters and one halving event in the last 2.5 years. Most risks are on clients.
3. Physical risks - theft, fire in facilities. Local risk management taken seriously in all regards. On top - we diversify facilities, being used.
4. Local authority's abuse of power. Full legal compliance, direct dialog with local authorities, signed MOU with local ministry of finances, deep knowledge and personal involvement in local business and administrative scenes.

Incubation/Acceleration programs accomplishment

Y-combinator Startup School
Konfidio Acceleration Program

Photos

Photo 1 - We help cryptominers to reach cheap renewable energy sources

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Idea
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Finance
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Business model
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