GDS Holdings is on a mission to raise up to $1 billion to expand its data center operations outside China. The company, listed on both the Hong Kong and New York stock exchanges, is looking to attract global investors to support its Singapore-based arm, GDS International, as it seeks to grow its presence in Southeast Asia.
The person asked not to be identified and said that GDS is in discussions with an adviser of potential backers. GDS would still hold a big minority interest in the deal if concluded. However, those fundraising details are still in the works as discussions persist.
Only a few months ago, GDS highlighted its ability to land financing for the international expansion side of business. GDS International was the firm of choice for a $672 million Series A funding round that eventually swelled more than 15% from its initial amount. The deal also includes new investors, China’s Boyu Capital, Hillhouse Investment and Princeville Capital, retaining the same 47.3% stake held by CVC.
Established in 2022 and headquartered in Singapore, GDS International currently has 330 MW of data center capacity in operation and under construction. It also plans to develop another 340 MW in locations such as Hong Kong, Singapore, Johor in Malaysia, and Batam in Indonesia.
However, GDS is experiencing financial difficulties even though it has ambitious growth plans. For Q1 2024, the company reported a net loss of 345 million yuan ($47.7 million), still an immense amount but less than previous years – it was exactly for that period in time last year as well. Net revenue of GDS on a more positive note increased by 9.1% to 2,609 million yuan compared with Q1-23.
The pursuit of new funding underscores GDS’s long-term plan to grow its presence in Southeast Asia, where demand for data center services is soaring. The alliance reflects the company’s resolve to access international demand for digital infrastructure beyond China.
The GDS approach to doing business highlights the need for significant financial resources when attempting ambitious growth plans. This would be an important investment for the company especially as it tries to expand internationally and compete in a very cut-throat data center market.
