Spondoolies Tech has secured $5 million in Series B funding as it develops two new generations of mining chips.
Spondoolies Tech closed $5 million in Series B funding in December 2014, bringing total capital raised to $11 million. The Israeli company, which launched in 2013 and shipped its first products in 2014, is developing two new generations of mining chips while pursuing a strategy of vertical integration into mining operations.
Founder Guy Corem outlined the company's vision in interviews with CoinDesk and Cryptocoin News. Rather than stay focused solely on hardware sales, Spondoolies plans to operate its own mining farms and capture 30 percent of Bitcoin's network hashrate. This vertical integration strategy differs from other hardware manufacturers who remain equipment vendors without direct mining operations.
Corem acknowledges a hard reality about home mining: it becomes unprofitable as difficulty rises and miners lack access to cheap electricity. The company's SP20 targets home miners with aggressive cost reduction, but the founder expects the home mining market to decline as operations shift toward professional hosting facilities. Spondoolies is positioning itself for this transition by developing hosting services alongside hardware.
The company is developing third and fourth generation miners, with a strategic choice to skip 20nm production entirely. According to Corem, "the technological gains at 20nm don't justify the advancement," so Spondoolies will move directly from 28nm to future nodes. The third generation will match competitors' 16nm performance while costing half as much, leveraging a mature 28nm manufacturing process for better yields.
Spondoolies designed its newest miners with modular upgrade paths. Rather than replace entire machines, users can swap out hashing boards as technology advances. This design comes with a tradeoff: the higher power consumption makes these machines unsuitable for home mining, requiring professional hosting facilities with access to bulk power contracts.
A customer verification problem prompted a new feature in Spondoolies' hardware. Following complaints from Gawminers customers about not receiving promised hashrate, Spondoolies is embedding proof of hash rate verification directly into the ASIC. The feature ties machine output to customer contracts, allowing miners to independently verify their exact computational output.
The company also contributed its RockerBox chip to Technobit Dice, a gambling device that outputs 150 GH/s. Priced at $78 per unit, the device lets casual users attempt block solving via USB connection. It won't generate significant profits unless someone hits a block, but the low price point appeals to people interested in mining who can't afford dedicated equipment. Bulk orders of 10 units receive pricing breaks.
Spondoolies has developed a strong reputation on Bitcointalk forums where miners discuss equipment specifications and performance. This engagement, combined with product quality, made the company a preferred choice for serious operations. Corem expects shipping of third generation products beginning in Q1 or Q2 2015, with target pricing undercut ting established competitors significantly.
