Bitcoin News Today: Satsuma Technology raises £163.6M in bitcoin-backed convertible note oversubscribed by 63.7%

Satsuma Technology PLC, a UK-based bitcoin treasury and decentralized AI infrastructure company, has secured £163.6 million ($217.6 million) through an oversubscribed convertible note offering. The round was led by ParaFi Capital and included participation from major institutional investors such as Pantera Capital, DCG, Kraken, Arrington Capital, BTC Opportunity Fund, and Borderless Capital, among others [1]. The fundraising, which was launched on June 24 and closed on July 28, exceeded its minimum target of £100 million by 63.7%, reflecting robust investor demand for the firm’s asset-backed capital structure [1].

The convertible notes are set to convert into ordinary shares at a price of £0.01 per share, subject to shareholder approval and the publication of a prospectus. A general meeting is expected to be convened shortly, with the draft prospectus already submitted to the UK’s Financial Conduct Authority for review [1]. The funds will be used to expand Satsuma’s operations, maintain a minimum of three months of working capital in cash, and allocate the remainder to its bitcoin treasury, which is held by its Singapore subsidiary [1].

Notably, a significant portion of the investment was made in bitcoin, with Satsuma accepting 1,097.29 BTC in lieu of £96.875 million in cash. The firm explained that the bitcoin settlement supports its broader treasury strategy, with the BTC amount determined using a fixed daily rate over a 24-hour subscription window [1]. This approach aligns with Satsuma’s recent acquisition of 28.56 BTC for $3.4 million, following a £5 million seed round in June [1].

Satsuma’s CEO, Henry K. Elder, described the fundraising as a “landmark validation” of the firm’s core thesis—that the integration of a Bitcoin-native treasury with decentralized AI infrastructure represents a transformative shift in corporate value creation. Elder emphasized the significance of being the largest fundraising by a London-based company with a bitcoin treasury and highlighted the trust demonstrated by investors who chose to participate using bitcoin for the first time in London [1].

The capital raise comes amid a growing trend of UK-based firms adopting bitcoin as part of their treasury strategies. While U.S. firms such as MicroStrategy continue to lead in corporate bitcoin acquisitions, UK-based companies are increasingly joining the trend. The Smarter Web Company, listed on the Aquis exchange, holds the largest public bitcoin treasury in the UK with 2,050 BTC valued at $235 million [1]. Other notable entities include Phoenix Digital Assets and Coinsilium, which hold smaller but strategically significant bitcoin reserves.

The expansion of the UK bitcoin treasury market has not been without controversy. Recent discussions on social platforms have highlighted concerns over potential market cannibalism, with some investors questioning overlapping strategies between firms backed by the same institutional supporters [1]. Despite these concerns, the capital raise by Satsuma underscores the maturing acceptance of bitcoin as a legitimate corporate asset and the increasing appetite for innovative capital structures within the digital asset ecosystem [1].

The firm’s stock, trading under the ticker SATS, fell over 25% in early trading following the announcement. Since disclosing its bitcoin treasury policy in June, the stock has lost more than 50% of its value, trading at £3.70 as of the latest update [1]. The volatility highlights the challenges inherent in integrating digital assets into traditional financial models, but also reflects the high expectations set by the firm’s ambitious growth strategy [1].

Satsuma’s approach to using bitcoin as collateral in capital raises could serve as a model for other firms seeking to monetize their digital assets without liquidation. By aligning its capital structure with its asset base, the firm aims to build a more stable and resilient balance sheet, potentially reducing exposure to the volatility of traditional markets [1].

As the firm moves forward, the successful completion of the convertible note round positions it to expand its operations and further develop its AI infrastructure and revenue-generating capabilities on the Bittensor network [1]. With a strong institutional backing and a clear vision for the future of corporate finance, Satsuma is well-positioned to play a leading role in shaping the next phase of the bitcoin treasury market [1].

Source: [1] Satsuma Technology raises £164m in Bitcoin-backed convertible bond led by ParaFi (https://www.proactiveinvestors.com.au/companies/news/1076157/satsuma-technology-raises-164m-in-bitcoin-backed-convertible-bond-led-by-parafi-1076157.html)