This is pretty much related with the initramfs-tools issue worked in LP 
#1879987 - it was fixed recently on initramfs-tools versions:
0.122ubuntu8.17 (Ubuntu 16.04 - Xenial)
0.130ubuntu3.11 (Ubuntu 18.04 - Bionic)
0.136ubuntu6.3 (Ubuntu 20.04 - Focal)
0.137ubuntu12 (Ubuntu 20.10 - Groovy)

Cheers,


Guilherme

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https://bugs.launchpad.net/bugs/1122245

Title:
  booting from a cloud image hangs until virsh console is used

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