Modular Data Center Firm IO Raises $505M

IO, the colocation provider known for leasing out space inside data center modules housed in large facilities it operates around the world, has secured $505 million in financing from Deutsche Bank and Macquarie Capital.

The funds have allowed the company to consolidate US debt and buy two of the four properties its US data centers occupy, IO president, Tony Wanger, said.

The announcement is the latest example in what has been a steady stream of investment in US data center providers this year.

Earlier this month, modular data center startup Keystone NAP raised $15 million to fund its data center project in Pennsylvania. In February, Silicon Valley-based Vantage Data Centers announced a $300 million investment to help fund data center construction in California and Washington State.

In January, Atlanta-based T5 Data Centers said it had raised $70 million to pay for data center construction in North Carolina.

Echoing what representatives from other data center companies have said recently, Wanger said lenders are generally more knowledgeable about the data center sector today than they were even five years ago, so data center providers have easier access to capital than they did back then.

The new IO is one of the two companies that resulted from a split of the old IO last year. The old IO was both a data center provider and a data center technology company, designing and building modular data centers and data center management software.

The two businesses were separated, forming the new IO, a data center provider, and BaseLayer, a technology company. IO continues to provide data center space inside BaseLayer modules housed in its facilities, acting as a BaseLayer customer.

Read more: Modular Data Center Firm IO Split into Two Separate Companies

Today, the company has two data centers in its native Phoenix market – one in Phoenix and the other in the Phoenix suburb of Scottsdale – one data center in Springsboro, Ohio (just outside of Dayton), and another one in a former New York Times printing plant in Edison, New Jersey. The company also operates data centers in Slough (near London) and Singapore.

Slough is the most recent market IO has entered. The data center was officially launched in June 2015, with Goldman Sachs as the anchor tenant. Goldman was also instrumental in IO’s expansion into Singapore in 2013, where it was the anchor tenant.

The buildings and land IO has bought out with the help of its new financing are the properties in Ohio and New Jersey. The company also recently bought a third property in Phoenix, a nine-acre piece of land adjacent to its Phoenix facility, where it plans to build a three-story data center.

Correction: IO bought the land and buildings at its locations in Ohio and New Jersey, not at the two Phoenix sites as the article previously stated.