Compute North, digital currency service provider in Eden Prairie, raises $25 million

An Eden Prairie-based provider of high-performance computing space has secured $25 million in new capital to help other companies dig for digital gold.

Compute North provides computer space, security and access to cheap sources of energy for digital mining companies that use their own computers for the computational grunt work to find new cryptocurrency including bitcoin, Ethereum, litecoin, and others.

"We build, operate, manage and run sites for Bitcoin miners, Ethereum miners and anybody in the blockchain cryptocurrency space," said Dave Perrill, Compute North's chief executive.

The company also has sites in Texas, South Dakota and Nebraska.

Compute North's $25 million in debt and equity financing is from Connecticut-based private investment company Post Road Group, as well as some private family offices, industry leaders and strategic partners to expand their operations and add employees.

"This injection of capital allows the company to meet customer demand, innovate our services, and expand our great team," Perrill said.

The new financing will go toward an expansion of their facility in Nebraska, groundbreaking of a new data center in Texas and adding employees.

The company currently has 30 employees and Perrill anticipates doubling head count in 2021. Perrill wouldn't disclose company finances, but he did say the company did less than $20 million in revenue during 2020 and anticipates to increase that by five to 10 times in 2021.

Digital mining companies find new cryptocurrency through computational intensive computing. The success of their efforts is generally tied to the amount of computational capacity they can leverage. Those requirements demand huge amounts of space and energy.

Server farms that host the equipment are often located in fairly remote settings and adjacent to cheap sources of energy. In addition to the computers themselves drawing power, the air conditioners and other cooling mechanics for the computers consume a substantial amount.

Compute North has designed its facilities to use renewable energy sources when possible and to be curtailable, meaning they work with their energy partners to shed load if and when they need it, Perrill said.

"We take a really unique strategy to this problem by working from much more of a power and energy development angle," he said. "We work to be a strategic asset to the grid versus what I consider a parasitic load."

The company has approximately 200 clients ranging from retail customers with a few machines to Nasdaq-listed public companies.

"We've certainly seen an evolution in the industry over the last four years," Perrill said. "They've gotten a lot larger, a lot more sophisticated and have much larger capital and operational requirements."

Clients generally bring their own hardware while Compute North provides power management, power engineering, electrical engineering and the sitework and site development to make the centers run efficiently, effectively and at low cost.

Compute North also provides system monitoring and managed service offerings to clients.

"We are a really good solution for customers that are looking to getting into the cryptocurrency, bitcoin, blockchain sector but don't want to simply go buy a coin on an exchange," Perrill said. "The mining is a really interesting perspective because you participate in more of the value creation of the way these networks work."

Patrick Kennedy • 612-673-7926