Baltimore cryptocurrency startup OBM Inc. has raised $3 million in Series A funding, with the goal of expanding the services it offers to cryptocurrency mining companies.
OBM’s software product, Foreman, allows companies to manage their entire roster of cryptocurrency mines, the devices that process transactions performed on currencies such as Bitcoin. Each time a mine processes a transaction, the owner receives part of a Bitcoin. OBM works with several publicly traded cryptocurrency mining companies such as Hut 8 Mining and Iris Energy.
"A Bitcoin mine is kind of like a computer," CEO Daniel Lawrence said. "When you're monitoring or managing 30,000, 40,000 or 50,000 computers, it gets to be very cumbersome."
NYDIG, a Bitcoin company that raised $1 billion in growth equity in 2021, contributed the entire $3 million of the round. The new funding for OBM comes as the cryptocurrency industry has come under increased scrutiny for its environmental impacts and as Bitcoin has seen its value drop 46.36% in the last six months. Despite this, Lawrence said he believes in the long-term value of the technology and has plans to hire more employees, open OBM's first office and further develop his company's software in the coming months.
While the decline in the value of cryptocurrency tends to drive some consumers with Bitcoin mines away, Lawrence said the business market OBM relies on has remained stable. To that end, OBM plans to bring on eight additional employees, with a focus on hiring in the Baltimore region.
"Because we're [business-to-business] software, we need to be hands on with our customers, they like to feel appreciated," Lawrence said. "So we're putting some of the capital towards making sure we can be very high touch with some of the customers."
The company also plans to move into an office in mid-June inside the same building as Monument City Brewing in the Highlandtown neighborhood.
Outside of income from mining itself, Lawrence argued that the increased demand for electricity caused by Bitcoin mining is a benefit for the stability of the power grid, by incentivizing power companies to produce more electricity to supply cryptocurrency mines.
"Bitcoin provides this controllable load for the grid that really helps balance the grid and help prepare for those big demand hits when it's a hot day or a cold day," Lawrence said.
On a day with a large of amount of demand, Bitcoin mining can be shut down or reduced, allowing for that electricity to be used for other purposes like warming households.
In the fall of 2021, in response to the failure of the Texas power grid earlier that year, Texas Gov. Greg Abbott met with cryptocurrency businesses to discuss how the technology could possibly help the state, according to Bloomberg.
A new aspect of the OBM software allows for Bitcoin miners to be placed in a “sleep” mode, letting the machine cool down and preventing the damage that is caused to electronics by an instant shutdown. Currently, Lawrence said companies shut down mines manually. Lawrence wants to develop the software so mines can be shut down in a matter of seconds, instead of a matter of minutes, in response to power grid needs.
“We want to use a lot of this money to further connect with the grid and the energy markets and really provide a turnkey solution for people to gracefully participate in these energy programs,” Lawrence said.
The Cambridge Bitcoin Energy Consumption Index estimates that worldwide, Bitcoin consumes over 119 terawatt hours of energy annually, more than the entire country of Pakistan. Concern about the large carbon footprint of the industry has led companies to source energy from renewable sources, such as solar and wind, Lawrence said. Currently, there is a bill in New York state legislature that would put a two year moratorium on Bitcoin mining, unless they use 100% renewable power.
Lawrence first started developing what would become OBM in 2016, with the goal of managing a Bitcoin mine he had with OBM co-founder Jake Luers. The duo built a Bitcoin mine in a detached garage behind Lawrence's father’s house in Westminster.
“It got really tiring having to drive up there every single day for an hour just to reboot the miners,” Lawrence said.
In 2020, realizing that the software they created had potential, they commercialized the product. Two years later, as the company continues to grow, Lawrence said he believes cryptocurrency is part of the future.
"I think it solves a whole bunch of problems," Lawrence said, referring to cryptocurrency. "It's not just a way to generate a lot of money."
