Fabric Systems, a bitcoin mining hardware startup, has raised $13 million in a seed round fund.

Participants in the funding round included bitcoin miner TeraWulf, Skype co-founder Jaan Tallinn’s Metaplanet fund, Blockchain.com, and 8090 Partners.

The company has said that the funds will be used to finance the development of two main launch products, including a liquid immersion cooled ASIC machine.

Fabric Systems claims that these products will achieve an energy efficiency of 20 watts per terahash (watts/TH).

According to the company, its launch product, an Immersion Cooling ASIC, is a type of machine that is immersed in a liquid of a certain kind instead of being air-cooled with traditional fans.

Although dip-cooling types of ASIC machine cooling technology have been around for a long time, they have more recently been used in the crypto industry by companies like Argo and Riot on a large scale in Texas.

These cooling machines are guaranteed to “outperform all existing bitcoin miners on the market today” in terms of energy efficiency. They are also designed to achieve a power efficiency of 20 watts/TH.

According to bitcoin mining company Luxor, these machines are divided into three efficiency levels: “old generation” ASICs are classified as above 68 J/TH, “mid generation” as 38 to 68 J/TH, and “latest generation” as under 38 J/TH. The joule measurement is interchangeable with watts.

Fabric Systems also said its machine will go into production in the second half of 2023, with shipments starting in the third quarter.

Co-founder and CEO Michael Gao said the software and the hardware products are “the culmination of years of R&D since 2019”.

Previously, Gao founded Luminous Computing, a photonics AI supercomputing startup backed by Bill Gates, which raised more than $130 million in funding.

At the young age of 15, Gao discovered bitcoin in 2011 and founded a bitcoin mining operation from his bedroom.

Fabrics Systems’ other co-founder, Sagar Reddy, is the chief technology officer. He has 22 years of technical leadership in fully custom chip design and system architecture.

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