Pi Datacenters to raise Rs 540 crore from institutional VCs

The company plans to make an incremental investment of Rs 600 crore in its proposed data centre at Mangalagiri in Guntur district over a period of four years

Pi Datacenters, an Andhra Pradesh-based technology startup, is in the process of raising Rs 540 crore from institutional venture capitalists to kick-start its operations from Mangalagiri, according to founder and chief executive officer Kalyan Muppaneni.

Incorporated in September 2014, Pi Datacenters has already raised Rs 60 crore from angels in the initial round recently. The company plans to make an incremental investment of Rs 600 crore in its proposed data centre at Mangalagiri in Guntur district of residuary Andhra Pradesh, over a period of four years.

“We are already in talks with five institutions based out of Asia-Pacific and the US. We expect to complete the fund-raising exercise in a couple of months,” Muppaneni, who prior to starting Pi Datacenters worked with semiconductor chip maker Intel Corporation for over 15 years, told Business Standard.

Construction work on the company’s facility, which Muppaneni claims to be south India’s first Tier-4 certified data centre, will start by the end of May 2015. The ‘purpose-built’ greenfield facility, to come up on 10 acre with constructed area of 500,000 sft, will commence operations from April 2016, he said.

“The facility, with a capacity of 5,000 server racks, will be powered by an on-site substation that can support up to 60 Mw,” Muppaneni said, adding that the company was expecting to start garnering revenues after 18 months from the time of commencing operations.

According to information technology research and advisory company Gartner Inc, the Indian data centre infrastructure market, comprising server, storage and networking equipment, will total $2.03 billion in 2015, a 5.4 per cent increase from 2014 revenues of $1.92 billion. In its recent report, Gartner said India will be the second largest market for data centre infrastructure within the Asia-Pacific region, and it will also be the second fastest growing market in Asia-Pacific in 2015.

Stating that the company was targeting customers from governments and city administrations, and from banking, financial services and insurance (BFSI), e-commerce, education, healthcare, pharma and automobile, Muppaneni said they were expecting 75 per cent of the business to flow in from India and the remaining from Asia-Pacific, the US and Africa.

“Once we have the bandwidth, we will look at expanding to other major cities in India. This, however, will be in the long-term,” he said.