Layer1 Secures $50M from Peter Thiel, Others to Mine Crypto in Texas

Cryptocurrency investment and infrastructure platform Layer1 has secured $50 million from a number of industry stakeholders in a Series A funding round.

As Fortune reported on Oct. 15, venture capitalist and PayPal co-founder Peter Thiel, early stage investor Shasta Ventures and other industry players committed $50 million to Layer1, which plans to build a wind-powered Bitcoin (BTC) mining facility in West Texas. Layer1 is reportedly planning to vertically integrate its mining operation in the United States.

The place nobody has taken advantage of yet

Commenting on the development, Layer1 co-founder Alexander Liegl pointed to competitive power prices in Texas, further noting that nobody in the mining industry has taken advantage of them, primarily due to the appropriate cooling technology. Liegl continued:

"We expect our chips to be competitive for at least eight years now. You want to have your own chips in hand. We also have our own electricity substations: effectively that's as close you can get to owning your own power plant.”

Now that the company has raised substantial funds, it intends to allocate them for building of its own power substations and crypto mining machine infrastructure. As part of its plans, Layer1 has also entered a partnership with Chinese semiconductor company to produce its mining chips.

In late December 2018, Layer1 concluded a $2.1 million seed funding round backed by Thiel, crypto-focused venture capital company Digital Currency Group, and American investor and Protégé Partners founder Jeffrey Tarrant, among others. At the time, the company aimed to direct the raised funds to the further development of programmable money and store-of-value applications.

Recent mining developments in the U.S.

Earlier in October, news broke that Chinese crypto mining giant Canaan Creative filed a $200 million initial public offering request with the U.S. regulators in July, and will issue 1.26 billion shares which will be closed on Oct. 20. Canaan is one of the three major Chinese crypto mining companies alongside Bitmain and Yibang International.

In the meantime, BCause Mining, a Bitcoin mining operation in Virginia Beach in the U.S., was recently ordered to liquidate its assets and lay off its 27 full-time and four part-time workers.