Georgian fund backs BitFury data centre

The investment comes only a few weeks after the state-backed group completed the first deal from its $6bn debut fund.

Georgian Co-Investment Fund (GCF) has invested $10 million in a convertible note issued by BitFury, a provider of servers and data center solutions to the bitcoin and crypto currency industry, according to a statement.

BitFury, which was founded in 2011, claims to be the world’s leading provider of servers and data centre solutions to the bitcoin and digital currency industry, and one of the largest miners of bitcoin, with data centers located in Finland, Iceland and Georgia.

The proceeds from the financing will help BitFury to expand its servers, the firm said. “This cooperation will allow us to undertake the world’s largest bitcoin mining operations in Georgia and meet the growing consumer demand for cutting-edge bitcoin products,” George Bachiashvili, CEO of GCF, said in a statement.

The investment in BitFury is the second deal GCF has completed from its debut fund, a $6 billion vehicle that was raised in October 2013. Last month, the firm acquired a Georgian hydro power plant in a $98 million deal.

The GCF targets opportunities in Georgia on behalf of sovereign wealth funds, global corporations and private family offices from countries including the United Arab Emirates, Azerbaijan, Turkey and Kazakhstan. It invests a minimum of $5 million in each deal, but equity tickets can vary depending on the deal, according to a spokesperson. GCF targets internal rate of returns of 17 percent, the spokesperson added.

Investors in the fund include the Dhabi Group, Ras Al-Khaimah Investment Authority from United Arab Emirates, State Oil Fund of Republic of Azerbaijan and Bidzina Ivanishvili, a former prime minister of Georgia.

With its $6 billion of backing, GCF debuted in this year’s PEI 300 – our annual ranking of the world’s largest private equity managers by size – at no. 40. This put GCF eight places below the Russian Direct Investment Fund (RDIF), which debuted on no. 32 having raised $7.1 billion since the start of 2009.