Compute North
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
Compute North was a Minnesota-based crypto infrastructure company founded in 2017. Starting as a cryptocurrency mining business, it later pivoted to hosting services for other miners, becoming one of the world's largest bitcoin mining hosting firms. It operated four data centers in the U.S. (South Dakota, Nebraska, and two in Texas), hosting mining machines for marquee names including Marathon Digital, BitNile, Sphere 3D, HIVE Blockchain, and Compass Mining. It raised about $451 million in funding and reached a ~$500 million valuation.
02 / Compute North FAILURE REASONS
Failure reasons
Three forces converged: the 2022 crypto bear market crushed miners' profits, U.S. electricity costs surged, and the long gap between constructing two new data centers and becoming profitable strained cash flow. The fatal blow was a $300 million loan from lender Generate Capital (February 2022) to build the Texas and Nebraska mega-sites: with about a third still outstanding, Generate seized some of the sites in July 2022 and cut funding for the rest. Unable to service debt obligations worth up to $500 million, the company filed for Chapter 11. Its service agreements also did not let it pass through energy costs to customers, leaving it exposed to power-price spikes.
03 / EVENT HISTORY
Events in the structured record
- Bankruptcy
CoinDesk reports Compute North filed bankruptcy restructuring in the U.S. Bankruptcy Court for the Southern District of Texas on 22 Sep 2022, listing as much as $500 million owed to at least 200 creditors. Official Form 309F1 / Epiq notice independently lists petition date 09/22/2022, lead case 22-90273 (MI), Compute North Holdings, Inc.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
Raised approximately $451 million in total, employed about 40 people, and was valued at about $500 million.
- 02
In February 2022 it borrowed $300 million from Generate Capital to build two large mining facilities in Texas and Nebraska; in July Generate seized the assets and cut off further funding, and in late September the company filed for Chapter 11, reporting liabilities of up to $500 million and $128.3 million in long-term debt — including $99.8 million to NextEra, $21 million to Marathon and $7.5 million to Foundry.
- 03
The assets were sold piecemeal: Generate bought equity in the two large facilities for $5 million while assuming debt and customer obligations; Foundry bought two facilities (17MW) along with miners and intellectual property; Crusoe Energy bought container assets for about $1.55 million.
- 04
No audited loss figure was publicly disclosed; debt totals and asset sale prices are not losses.