Nscale, the $14.6bn data centre company backed by Nvidia, carries a significant credit shadow from its predecessor Arkon Energy. Arkon, a Melbourne-based crypto miner, raised $155mn in Series A funding in December 2024 but lost $102mn in 2024, largely due to $19.7mn in staff costs and a $40.8mn warrant liability. This financial strain led to defaults on two loans totaling $110mn from Sandton Capital Partners, a distressed credit investor.
Sandton, which also led Nscale's Series A and B funding, charged Arkon up to 17.5 per cent interest on loans, including a $44mn loan for a bitcoin mining facility sold at a steep discount. The warrants Sandton holds, equivalent to 14 per cent of Nscale's shares, and its continued support through subsequent funding rounds underscore the lasting impact of this troubled past.
Source: Financial Times Companies · Summarized by HeadlinesBriefing