Firmus Technologies withdrew its planned $7 billion share offering after investors balked at a proposed $43.7 billion valuation, leaving its founders seeking more private funding for a capital-intensive expansion. The Sydney-based startup planned to use the listing to raise money, then borrow more to build data centres in Australia, Singapore, Malaysia and Indonesia.
The float had been described as potentially the second-biggest in Australian history and the country’s biggest initial public offering since Telstra listed in 1997. By Thursday, bankers had considered lowering the valuation towards $30 billion, and the proposed per-share price had fallen from $11 to $8.25. By Friday, Firmus had pulled the offering.
Who Put Up the Capital
Firmus said it had secured $US2 billion ($2.86 billion) in investor commitments, including from Nvidia and Blackstone. Nvidia already held a 7.2 per cent stake, had reportedly provided funding and sold chips to the company. The planned public float would have brought in a further $7 billion, while Firmus also planned to borrow more to finance data-centre construction.
The company’s founders, Oliver Curtis, Tim Rosenfield and Jonathan Levee, started Firmus in 2019 as a bitcoin mining company. Curtis served a year in jail in 2016-17 for insider trading before he co-founded the business. Firmus now says it has two operational sites in Australia and Singapore, with five more “under development.”
Morningstar senior market strategist Lochlan Holloway said the company’s valuation was similar to Woolworths. “The economics look good now and the growth is very fast now, but what that looks like again in five or 10 years is the big question mark,” he said.
Ten Cap Investment co-founder and lead portfolio manager Jun Bei Liu said the proposed valuation was nearly three times what Firmus had been valued at when it raised money a few months earlier. “The valuation for the company was way too high to start with,” she said. Liu said the company would need to return to public markets because “it’s a very capital-intensive business” that “requires listed shares.”
Infrastructure and Investor Risk
Investors questioned whether Australia’s energy infrastructure could support the planned data centres. They also raised concerns about the limited detail in the prospectus, Firmus’s growth prospects and whether rapid expansion in AI and data centres would continue.
Floodline Research founder Anna Wu said the market no longer accepted any company with AI in its name at any valuation. She said rising capital costs and a lack of detail about Firmus’s offering added to questions about the price. Concerns about Curtis’s criminal past also added ambiguity, Wu said.
Philip Wohl of Reliance Investment Research said Firmus “ran into a wall of AI anxiety right at the time that they had planned to list.” He called the company’s claim that market volatility prevented it from listing at its desired price “a euphemistic way of describing exactly what happened.” The market, he said, had grown more uncertain about AI hardware, and investors didn’t show demand at the price Firmus sought.
Private Funding and the Next Listing
Firmus pulled out of an appearance at a federal parliamentary inquiry into AI on Thursday morning as it tried to save the offering. Its founders are now seeking further private funding, and the company plans to attempt a Nasdaq listing next year.
Wu said Firmus might seek a larger investment from Nvidia. She described Nvidia’s investment activity as “going around the world buying anything that it thinks is going to take over in the local market.” Holloway said Firmus’s data centres could put Nvidia chips to use, and customers such as Meta and OpenAi could rely on companies like Firmus to access them. “There is a very, very short supply of Nvidia’s high-quality chips and a lot of demand for AI model training,” he said. “If you had access to those chips, which Firmus did with its partnership with Nvidia, you can basically name your price.”
The financing alternatives reflect the scale of Firmus’s planned expansion: it can seek private capital or try again to sell shares publicly. Holloway said surplus private cash had made it easier for companies to remain privately held, while the number of ASX IPOs had fallen considerably in recent years. Analysts expected delayed or withdrawn listings to become more common.