Cincinnati is set to be home to a new public company, and it marks a huge win for the region's burgeoning fintech industry.
On Tuesday, Cincinnati-based Griid Infrastructure announced it will merge with Adit EdTech Acquisition Corp., a special purpose acquisition company, or SPAC. The deal values the combined company at $3.3 billion — making it one of the region's most valuable startups ever.
The blockbuster deal is slated to close in the first quarter of 2022. Before it does, here's your primer with everything you need to know about Griid:
What does Griid do?
Three-year-old Griid is a bitcoin mining firm, meaning it uses heavy-duty computing technology to create additional bitcoin, the increasingly popular cryptocurrency. What separates Griid from its peers, however, is how energy efficient the firm's operations are. Bitcoin miners compete in a low-margin industry with energy being their biggest variable cost. Griid officials say they have access to a huge supply of power thanks to existing agreements, which should keep overall costs low and boost their profitability. In fact, officials believe they'll breakeven at a cost that's 42% lower than its peers when Griid is fully scaled, according to the firm's investor presentation.
Speaking of officials, who runs Griid?
Griid was founded in 2018 by Trey Kelly, an experienced entrepreneur and Miami University alum. Kelly co-founded Stampt, a mobile loyalty card startup acquired by Arizona-based Mobivity in 2012. He also was an early employee at OpenDNS, an internet security startup acquired by Cisco Systems in 2015.
Griid's C-suite also includes:
- Jerry King, chief operating officer: King served in the same role for Vets First Choice and Where, which were acquired by Covetrus and Ebay, respectively.
- Al Wallander, chief financial officer: Wallander is the former CFO for Dotloop, a darling of Cincinnati's startup scene that was acquired by Zillow Group.
- Dwaine Alleyne, chief technology officer: A former UBS investment banker, Alleyne co-founded Enso Financial Analytics, a leading provider of portfolio analytics for hedge funds and prime brokers.
- Mike Hamilton, chief research officer: Hamilton is a computer scientist and hardware engineer, who previously spent four years with Austin-based cybersecurity firm Ziften.
What is Adit EdTech Acquisition Corp.?
Adex EdTech is a special purpose acquisition company, or SPAC. This means the company was formed with the sole intention to buy a private company and take it public. Cincinnati-based Legacy Acquisition Corp., led by Ed Riguad, is a local example. Often these companies are given a time frame from when they raise their capital to when they must close a deal. In the case of Adit EdTech, the firm had until early 2023 to land a deal and raised millions to do so. Griid will receive $246 million in cash once the deal is finalized.
Once the deal is finalized, Adit's leadership team will part, though CEO David Shirer will remain on Griid's board of directors, according to filings.
How big is Griid?
According to filings, Griid currently operates three mining facilities and aims to have mining capacity of 734 megawatts operational by 2023.
On a financial note, the company is expected to generate $30 million in revenue this year, with that number projected to exponentially grow in short order. Griid officials expect to bring in $2.2 billion in revenue in 2024, filings show.
Summing it up, what does this mean for Cincinnati?
The impacts of Griid's ascent has two primary ramifications for the Cincinnati region:
- It adds another public company to the region's growing roster, one that represents a new segment of the broader financial services industry.
- It adds further fuel to the business community's ongoing push to position the Queen City as a hub for fintechs. That effort — dubbed Fintech Frontier — is backed by several heavyhitters including Cintrifuse, Western & Southern Financial and Fifth Third Bank.
