Zhibao raises $154.7M in Bitcoin-funded PIPE, holds BTC in treasury

Zhibao Technology closed a $154.7 million private placement funded entirely in Bitcoin, holding the 2,380 BTC received in treasury.

"The successful closing of this $154.7 million investment marks one of the most important moments in Zhibao's 10-year history," Botao Ma, director at Zhibao, said.

The deal, closed Aug. 17 under a securities purchase agreement dated July 31 and amended the same day, comprised 442 million units at $0.35 each. Each unit carries one Class A ordinary share and a two-year warrant exercisable at $0.35. Zhibao delivered 395,678,152 units at closing, with 46,321,848 more pending shareholder approval. Investors paid through 2,380 Bitcoins contributed to the company's designated wallet, valued at a $65,000 reference price set July 30.

The 442 million new shares plus warrant shares represent substantial dilution for existing holders, though ZBAO jumped 79 percent after the definitive agreement was announced. Zhibao plans to file a Form F-1 registration statement within 45 days of July 31 to cover resale of the shares and warrants.

The transaction traces to a non-binding term sheet dated July 22 that contemplated roughly 3,500 BTC, trimmed to 2,380 by the time the definitive agreement was signed. Investors including Metaverse Intelligence Tech Ltd. and DYT Info Pte. Ltd., both non-U.S. entities, participated under Regulation S of the Securities Act of 1933.

Zhibao, which listed on Nasdaq in April 2024, operates a PaaS-based digital insurance brokerage in China. The company had received a Nasdaq deficiency notice over its minimum bid price in July; the 79 percent jump after the Bitcoin deal helped address that.

The structure differs from most corporate Bitcoin treasury strategies, where companies buy BTC on the open market with cash or offering proceeds. Zhibao skipped that step, taking Bitcoin directly as payment for equity. At a $65,000 reference price, the 2,380 BTC position is worth $154.7 million, a sum that dwarfs the company's pre-deal market capitalization.

Bitcoin traded at $64,426, up 2.34 percent, as of 17:03 UTC on Aug. 17, according to Investing.com data. The deal adds direct demand for 2,380 BTC and follows a pattern of public companies treating Bitcoin as a balance-sheet asset, a trend led by MicroStrategy and followed by firms such as Tesla.

The financing gives Zhibao a war chest to deepen scenario integrations and expand AI-driven capabilities, Ma said. Whether other issuers follow the Bitcoin-funded PIPE template will depend on the reference price mechanism and shareholder appetite for dilution, but the deal marks one of the largest crypto-denominated equity raises by a Nasdaq-listed company this year.

This article is for informational purposes only and does not constitute investment advice.