UK-based Firm Satsuma Technology Raises £163.6M via Convertible Notes

• Satsuma raised £163.6M, exceeding its £100M target by over 60% in strong demand.
• £96.9M of the raise was settled in Bitcoin, marking a London Stock Exchange first.
• Funds will boost AI operations, with Bitcoin reserves held by Satsuma’s Singapore arm.

Satsuma Technology PLC (LON: SATS) has completed a £163.6 million capital raise via a secured convertible loan note. The London-listed firm initially aimed to raise £100 million but closed the round 63.7% above the target. The raise was heavily oversubscribed, attracting participation from institutional investors and leading digital asset firms. The books closed on 28 July after high investor demand continued beyond expectations.

ParaFi Capital led the round, joined by Pantera Capital, Digital Currency Group, Blockchain.com, and Kraken. Several London-based institutional equity funds with over £300 billion in assets under management also participated. The notes will convert into shares at £0.01 each, contingent on shareholder approval and publication of a prospectus. A general meeting will be held to seek approval for the conversion.

Bitcoin Settlement and Treasury Strategy

A significant part of the funding, £96.9 million, was settled in Bitcoin, representing 1,097.29 BTC. The company offered Bitcoin settlement to align with its strategy of maintaining a Bitcoin-native treasury. Satsuma’s Singapore-based subsidiary, Satsuma Pte, now holds the Bitcoin proceeds. The firm used a fixed daily exchange rate during a 24-hour subscription period to determine the BTC value.

This transaction marks a first for the London Stock Exchange, where digital asset settlement was accepted on such a scale. The company previously acquired 28.56 BTC worth $3.4 million following a £5 million seed round in June. Satsuma plans to retain at least three months’ working capital in cash and allocate the remaining funds to its Bitcoin reserves. A cap has been set to manage exposure to Bitcoin within prudent limits.

Operational Expansion and Financial Disclosure Plans

Satsuma intends to use the proceeds to grow operations and strengthen its developer team and infrastructure. The raised capital will also support new AI projects and initiatives on the decentralised Bittensor network. The convertible notes are secured by a first-ranking charge on the assets of both Satsuma and its Singapore unit. These charges will be automatically released upon conversion of the notes into equity.

A security trustee has been appointed to represent the interests of noteholders. The company has also committed to transparency through the publication of unaudited interim financial statements ending 6 August. It will introduce monthly financial updates, a rare practice among public firms operating in emerging digital asset sectors. This move aims to build investor trust and market confidence.

Market Reaction and Industry Context

Despite the successful raise, Satsuma’s stock (SATS) dropped over 25% on the day of the announcement. The share price has declined more than 50% since the company announced its Bitcoin treasury strategy in June. As of the latest trading, shares are priced at £3.70. Investors may be responding to the possibility of dilution or concerns about integrating digital assets into corporate finance.

Related: MARA Raises $850M to Repay Debt and Buy More Bitcoin 

Satsuma becomes yet another listed company in the United Kingdom to take a Bitcoin treasury strategy. The Smarter Web Company, listed on the Aquis exchange, at present owns 2,050 BTCs with a value of $235 million. It recently raised $21 million through a Bitcoin-denominated convertible bond. Phoenix Digital Assets and Coinsilium also hold Bitcoin reserves, though at smaller volumes.

Controversy emerged in July concerning UTXO Management’s support for Satsuma while also backing The Smarter Web Company. There have been complaints by some investors, meaning perceived market overlap and possible conflicts of interest. Nevertheless, the management of Satsuma is not ready to stop and implement its vision where decentralised AI and Bitcoin finance intersect.

The capital raise of Satsuma Technology is an important step towards the UK digital asset industry. It establishes a new benchmark for companies with a Bitcoin treasury listed in London. Having prominent investors in support of its strategy and operations, the company is geared to venture into its AI and blockchain infrastructure. The result also highlights the advancing presence of cryptocurrency as a factor in institutional finance and capital markets.

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