‘NxtGen appoints Avendus to raise $300 million at $900 million valuation’

NxtGen Datacentre and Cloud Technologies has appointed investment bank Avendus to raise $300 million at a valuation of nearly $900 million, as reported by Mint. If successful, this will be the company’s largest fundraise to date.

Founded as a provider of data centre and cloud-based infrastructure, NxtGen offers solutions across public, private, and industry cloud environments. The Bengaluru-based company last raised $13.5 million in a Series B round in 2015 from investors including International Finance Corporation (IFC), Axon Partners Group, and Intel Capital.

The fundraise comes amid rising interest in India’s data centre market, which is projected to grow from $4.35 billion in 2021 to $10.09 billion by 2027 at a CAGR of 15.07%, according to a May 2024 report by CBRE. The report attributes much of this growth to the increasing demand for AI-related storage and compute infrastructure.

NxtGen recently announced plans to deploy 12,000 GPUs by May to support AI computing needs. It currently operates over 1,000 GPUs, including Nvidia L40S and H100 models. According to a Businessworld report, founder and CEO AS Rajgopal estimated the company will require several billion dollars over the next three years and may consider a public listing depending on investor interest.

The company competes with firms such as Vantage Data Centers, Princeton Digital Group, and Aligned, according to market intelligence provider Tracxn. In FY23, NxtGen reported $24.9 million in consolidated revenue from operations, up from $23 million in FY22. However, losses widened to $10.6 million from $5.4 million the previous year.

Private equity interest in data centres has grown, with players like Blackstone, Everstone, and Brookfield making direct investments or forming joint ventures. Blackstone launched its Lumina CloudInfra platform with plans to invest over $300 million in a Navi Mumbai hyperscale data centre, while Everstone and Yondr Group committed $1 billion to develop facilities in India.

NxtGen’s services have gained attention as concerns about data sovereignty and foreign cloud dependence increase. The company states that regulatory focus on local data control is driving demand for its infrastructure solutions.