NextDC takes one-fifth stake in AUCloud in $35m fundraising

AUCloud has announced that it will launch an A$35 million fundraising round, which will include NextDC taking a roughly 20% stake in the company, as the former plans to expand nationally.

AUCloud said in a statement that it will increase the total by issuing new shares at AU$0.50 per share, which will also include an investment in NextDC of approximately AU$12.4 million.

According to AUCloud, the funding will be widely used to scale the business to “critical mass”.

“We continue to see a trend of greater emphasis on sovereign cloud services to ensure that all data remains within Australian legal jurisdictions,” said AUCloud CEO and Managing Director Phil Dawson.

“Our strategic partnership with NEXTDC, a leading provider of high-end data center facilities, will provide access to a powerful nationwide network of over 1,500 enterprise customers and over 730 channel partners.

“This fundraising allows AUCloud to expand its platform footprint in Brisbane, Melbourne and Adelaide, and expand its customer base into the security-conscious large enterprise market.”

NextDC will also be eligible for a seat on AUCloud’s board of directors, which will initially be NextDC CEO and Managing Director Craig Scroogie.

“NextDC has a deep understanding of the underlying cloud market dynamics gained through our nationwide network of high-end data center facilities across Australia. Following the injection of growth capital into AUCloud, we believe Phil and the team are very well positioned to benefit from the growing trend toward sovereign IaaS cloud and high security solutions,” said Scroogie.

AUCloud expects its pro forma net cash position to increase to A$41.5 million as of October 31, 2021 following the fundraising.

AUCloud was one of four cloud providers to achieve Certified Strategic Status under the Australian Government’s Hosting Certification in October. This followed in the footsteps of NextDC, after becoming a certified player to store sensitive data locally in August.

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