[Funding alert] DigitalOcean raises $50M from existing investors Access Industries, Andreessen Horowitz
Cloud company DigitalOcean has closed a $50 million Series C funding round led by Access Industries, with participation from Andreessen Horowitz (a16z). The funding follows the $320 million debt financing in February and brings DigitalOcean’s equity valuation to $1.15 billion.
In the past, Andreessen Horowitz has backed companies such as Facebook, Groupon, Pinterest, lyft, Slack, and Skype, to name a few.
Founded in 2012, US-based DigitalOcean has presence in 195 countries with three global offices, including Bengaluru, India.
The company claims that it has a high-growth business with $300 million in annual recurring revenue, serving more than 500,000 customers globally, with nearly two-thirds located outside the US.
DigitalOcean has created a strong niche in the $200 billion cloud market by catering to developers, entrepreneurs, and small businesses who opt to use DigitalOcean’s easy-to-use, affordable and scalable infrastructure over complex and cost-prohibitive options provided by others in the market.
Yancey Spruill, CEO at DigitalOcean, said the company was now freed up to focus on accelerating revenue growth, transitioning to free cash flow profitability in 2020, and position itself as a public company.
“We are delighted to extend our partnership with Access and a16z and see this capital as adding strength to our balance sheet enabling us to better serve our customers’ demand for our platform, especially during COVID-19 where we are seeing an acceleration of businesses transitioning to the cloud,” he added.
DigitalOcean started its India operations when it commissioned its first data centre in Bengaluru in 2016 with a seed investment of $5 million, targeted at the thriving startup and developer community.
According to media reports, some of its customers are OYO, Edge Networks, Magic Crate, Vakilsearch, Zerodha, WhatFix, Rapido and Market Pulse. In India, the company also works in collaboration with Nasscom 10,000 Startups and venture capital firms like Accel, Matrix, SAIF to support startups associated with or funded by them.
(Edited by Teja Lele Desai)