Princeton Digital Raises $505M in Mubadala-Led Equity Round for Asia Data Centre Platform

Asian hyperscale specialist Princeton Digital Group has landed $505 million in fresh cash to expand its regional data centre platform, with the Warburg Pincus-backed firm announcing today that it has closed on a new financing round led by Abu Dhabi’s Mubadala Investment Company with a $350 million commitment.

The cash injection from the $243.4 billion sovereign fund provides PDG with the funds to continue expanding its regional data centre network, while also giving the five-year-old firm additional credibility in an increasingly competitive APAC data centre market, co-founder, chairman and chief executive Rangu Salgame told Mingtiandi.

While PDG has been reported to be on its way to an IPO, Salgame declined to comment on any listing plans and presented the latest fund raising as a market endorsement, in addition to being a source of cash for building new data centres.

“Raising this capital puts us in a very strong position – our balance sheet is stronger than ever,” he said. “More importantly, it consolidates our position as an Asia Pacific leader and customers are rewarding us with new business.”

New Friends and Old

Investing alongside the $243.4 billion sovereign fund are existing PDG backers Warburg Pincus and the Ontario Teachers’ Pension Plan Board, with PDG planning to use the financing to fortify its network of data centres in Japan, India, Singapore, China, and Indonesia.

“PDG is a leading data center infrastructure platform operating in an attractive market with strong tailwinds and catering to rising demand from the hyperscale segment and more broadly Asia’s digital economies,” said Khaled Abdulla Al Qubaisi, chief executive officer for real estate and infrastructure investments at Mubadala in a statement. “We look forward to working with PDG’s management team to capitalize on the growth opportunities and create not only sustainable, long term value creation, but also support Asia’s digital infrastructure development as a vital enabler to economic progress.”

Al Qubaisi’s fund has played a growing role in backing Asian real estate ventures linked to the region’s new economy, including having established a logistics partnership with Sydney-based Logos which recently acquired a pair of projects in Sydney and Melbourne with a combined investment value of $460 million.

Mubadala has also been a key investor in JD Property, the real estate fund management division of mainland China e-commerce provider JD.com.

“We are excited to have a leading sovereign fund Mubadala as another blue-chip investor in PDG. Mubadala’s track record of long-term investments combined with extensive know-how in the digital infrastructure space makes it a great partner as we continue to scale our business,” said Salgame.

This latest round of financing comes after PDG had been reported in the middle of last year to be raising $400 million in advance of an initial public offering. Ontario Teachers’ had committed $360 million to the Singapore-based firm in 2020.

Expansion Steps

“Right now we are in five countries, after entering Japan last year, so going forward our strategy is about deepening our presence in the existing markets that we have,” Salgame said. Referring to the company’s regional network he added that, “We’re the only multinational operator at scale in China and we are the only China-based player operating at scale across the region.”

In June of last year PDG had entered the Japan market with plans for a 97 MW hyperscale facility in the Greater Tokyo area in what is expected to be a $1 billion project, then just two months later kicked off a $150 million Jakarta development as its sixth Indonesian project.

“Since making our initial investment we have been very impressed with the management team’s ability to successfully execute a highly differentiated strategy and focus on value creation,” said Ben Chan, senior managing director for Asia Pacific at Ontario Teachers’.

With the company already established in India, Singapore, China and Indonesia, PDG is picking up some new projects on the mainland where it serves the needs of the country’s Internet giants.

“We acquired a project outside of Beijing in Langfang and we have started construction on a project in Nanjing,” Salgame said, with the new acquisition in Hebei province adding some 66MW to PDG’s platform.

The company also plans to add Osaka to the Japan presence it established last year, while also expanding into Korea and the Philippines, with Salgame tying that proliferation to client demand.

“Our approach to going into a new market, or even choosing a site in a city, is based on the insights that we gain from our customers,” he said. “We get a lot of insights on where our customers are going and that gives us a lot of confidence in where we should be investing.”

Data Centres Heat Up

The fresh fund raising by PDG comes around five years after Salgame co-founded the digital infrastructure startup together with fellow Tata veteran Varoon Raghavan and Warburg Pincus, as a way to meet the growing need for professionally managed server facilities in Asia’s fast-growing markets.

“Since backing the founders in PDG’s formative days, we have been impressed by their leadership and execution of a strong thesis. We are excited to continue to be part of PDG’s journey and believe that the company is best poised to take advantage of a truly transformative market opportunity.” said Ellen Ng, Managing Director, Warburg Pincus.

Since Warburg Pincus made its initial commitment to the platform, Asia’s data centre industry has become a favourite target for institutional investors.

In January of this year, Singapore’s Keppel Corp announced that it had reached a $1.1 billion final closing on its second data centre fund, which targets investments in Asia and Europe

During this month, GLP was reported to be evaluating opportunities to raise $500 million for investment in expanding its set of mainland China data centres, and in 2020 Gaw Capital reached a $1.3 billion closing on a China digital infrastructure vehicle with backing from the Abu Dhabi Investment Authority (ADIA).