NEXTDC will purchase a nearly 20% interest in AUCloud’s operator as the latter seeks to the market to fund a new phase of expansion.
Sovereign Cloud Holdings’ trade name, AUCloud, stated it would issue additional shares to generate roughly $35 million, including placement to NEXTDC.
NEXTDC will eventually own 19.99 percent of the firm and a seat on the AUCloud board; its total investment would be roughly $17 million, according to a presentation deck provided by AUCloud. The proceeds of the equity raise will be used to develop “three additional sovereignty cloud platform zones in Brisbane, Melbourne, and Adelaide, are expected to be operational by 4QFY22, 2QFY23, and 4QFY23, respectively,” according to AUCloud.
The funds will also be used to upgrade storage and computing behind the zones and meet AUCloud’s working capital requirements. AUCloud stated that it would require additional engineering, sales, marketing, and operations personnel to support the nationwide growth of its services. The NEXTDC element of the arrangement also includes a strategic partnership component for AUCloud, providing access to NEXTDC’s business clients and channel partners.