Interoute Lands New Investors to Fuel Cloud Acquisitions

Cloud provider Interoute has taken on new private-equity investors as it prepares to make more cloud acquisitions. Funding from U.K.-based Aleph Capital Partners and U.S. firm Crestview Partners will help pay for acquisitions across Europe and the U.S.

Aleph and Crestview have agreed to buy a 30-percent stake in Interoute from minority shareholder Emirates Communications. The size of the investment has not been disclosed.

Interoute will build out its network, data center, and cloud platform. The European Infrastructure-as-a-Service provider launched close to 10 new zones last year, including its first two in the U.S. The equity will help it continue to aggressively expand, both organically and through acquisition.

The European data center provider market is undergoing a lot of consolidation, the biggest recent merger being Interxion and TeleCity in the data center space.

More European cloud acquisitions are expected, as market remains fragmented. Additional equity helps Interoute become a potential roll-up play rather than a potential acquisition.

The company emphasizes the network in its cloud. The company’s cloud platform is location-sensitive, meant to make compliance with European data-sovereignty laws easier. In-country data needs and data sensitivity is a partial contributor to the European cloud market’s fragmentation. Interoute’s specialization positions it well to act as a roll-up.

“Interoute seeks to more than double its revenues in the next 5 years, underpinned by demand for its enterprise networked cloud services,” said Interoute CEO Gareth Williams in a press release. “Adding new markets, capabilities and additional customers to experience these services will be the focus of the acquisitions. We are thrilled to have found ambitious tech-savvy partners who want to help us reach that goal."