East-West digital news: Goldman Sachs invests $15 million in Russian data center

Yesterday IXcellerate, a UK-headquartered operator of datacenters in Russia, announced it has secured a $15 million convertible loan from Goldman Sachs.

The bank Goldman Sachs, which will hold a 25% stake after conversion, has become the third key investor in IXcellerate after IFC and Sumitomo Corporation. Since its launch in 2011, IXcellerate has attracted $35 million in total from international investors for its Russian project.

The new funding will be used to expand the IXcellerate Moscow One Datacentre, which will have the capacity to collocate 2,185 racks. Two new data halls will be built in the coming months to collocate 1,100 and 350 racks respectively. Approximately 20% of this capacity is already reserved by existing and potential customers.

“In the nearest future, we are planning to expand further and rely not only on organic market growth and new investments, but also considering M&A opportunities,” stated Guy Willner, CEO and co-founder of IXcellerate.

The growing demand for data storage capacities is partly due the recent legislation on personal data storage, which requires organizations — including foreign ones — to store Russian citizens’ personal data in servers located on Russian soil.

“The market is also driven by overall customer maturity as well as a growing preference for outsourcing versus building and running in-house data centers. Colocation terms in Russia are getting more and more attractive from a cost perspective, while the quality of service and data center infrastructure increases constantly,” IXcellerate’s press service indicated in an exchange with East-West Digital News.

“In addition, Russia tends to get more integrated into global connectivity roots between Asia and Europe.”

A $250 million market

Last year, according it IKS Consulting data cited by IXcellerate, Russian commercial data centers generated nearly 17 billion rubles in revenues (some $250 million at the average exchange rate), up 21% in ruble terms and 11% in foreign currency terms from the previous year.

IXcellerate, an award-winning provider, serves such clients as as Thomson Reuters, Orange Business Services, Telia, NTT Communications, Evroset, Softline and others. According to its press service, the company is “growing faster than the market, having doubled the customer base (up to 70 accounts) and reached breakeven in 2016.”

Earlier this month, the company agreed upon a consulting project together with the experts of Uptime Institute. Following detailed analysis of the technical documentation, the Uptime Institute’s team will deliver design recommendations to optimize both the performance and operability of the data center. Working with Uptime Institute, IXcellerate intends to pass the audit and receive certification of the Tier III full compliance for future modules.