South Africa’s Teraco Closes Series-B Financing Round

Mergers, Acquisitions and Financial Results

Teraco Data Environments (Pty) Limited , the first provider of vendor neutral co-location facilities in South Africa, has topped up its operating capital with a further R50-million in a successful Series-B round of financing, consisting of equity and loans. This follows on the conclusion of a Series-A financing round of R45-million in 2008.

Series-A investors participated in this second round with one new investor, Guy Willner, co-founder and CEO of IXEurope (now Equinix Europe) who recently joined Teraco’s board.

About 65% of the funding, making up the bulk of the investment, was provided by Treacle Private Equity a majority black owned South African private equity group. This brings Teraco’s black ownership up to 31%. Teraco is an accredited Level 4 BEE contributor.

The finance will fund the development of the company’s data centre in Isando on the East side of Johannesburg. Construction is under way and will be complete by the end of the year. A number of Teraco customers have entered into agreements to move their telecommunications and IT equipment into the facility from January 2010.

World-class data centres are power intensive. Teraco Isando has a power capacity, supplied by dual feeds from Eskom, of 7 MVA (megavolt ampere), which is enough to cater for Teraco’s plan to expand the site, in various phases, to 3 500 square metres. All major South African carriers currently collocated in Teraco’s data centre in Cape Town will also be present in the new Isando colocation facility.

“The location of Teraco’s new data centre in Isando, more than 25km from Sandton Midrand and central Johannesburg, makes it an ideal disaster recovery site for companies wanting to safeguard their data from power failures in the main business districts. The building also offers an excellent high site for companies looking into utilising wireless services,” says Lex van Wyk, Managing Director of Teraco.

Meanwhile, this investment into the Ekurhuleni Municipality has been greeted warmly by local councilors. “Teraco is replicating a model that has been successful around the world in attracting investment and innovation into the region,” says Zweli Dlamini, Acting Executive Manager: Media Liaison, Design and Publication and Special Projects from Ekurhuleni Municipality, “By creating an open, neutral hub for IT and telecoms businesses to locate, Teraco will encourage further investment into the district”.

“Teraco’s truly neutral environment, allows companies within the data centre the flexibility to choose to connect to any carrier and partner. Teraco focuses only on providing the best environment and so we never compete with our customers. They are free to interconnect with each other or any service provider. This brings in a new era in the local ICT sector and enables new types of businesses and a bigger variety of services never before possible in South Africa,” van Wyk concludes.