Chinese data center operator raises $3.7b Series A
Tenglong Group, a data center operator based in Beijing, has raised a RMB26 billion ($3.7 billion) Series A round led by Morgan Stanley Private Equity Asia and state-owned China Nanshan Development Group.
Additional investors include Kaiyuan Capital, a real estate-focused private equity firm, Hong Kong-listed Haitong Unitrust International leasing, and Huaneng Invesco WLR Investment Consulting, a joint venture between Huaneng Capital and Invesco. It is being called the largest-ever funding round in the data center sector.
Founded in 2015, Tenglong provides decentralized data center services that are tailor-made for each corporate customer. It focuses on the construction and operation of cloud computing centers. Customers include internet companies, financial firms, and government departments. It has built a RMB700 million data center for Tencent Holdings in Chongqing.
As of the third quarter of 2019, Tenglong claimed to have 241,000 square meters of projects under construction. The company predicts it will have 1.47 million sqm under construction by the end of 2024.
Feng Lu, a general manager of China Nanshan Development, said that Tenglong would leverage synergies with his firm’s portfolio company Blogis, a logistics platform that owns around 5 million sqm of warehouse resources in first-tier Chinese cities. He said that Nanshan Group would also provide land resources from its core logistics parks for Tenglong to develop data centers.
The deal builds on significant traction in China’s data center space this year. In February, Bain Capital acquired a majority interest in the data center construction and maintenance division of Shenzhen-listed NetScience Technology for RMB990 million. The business was then combined with Bridge Data Centers, which was bought by Bain in November 2017, to scale up into a region-wide business offering wholesale and custom solutions.
Meanwhile, Actis has invested $64 million in Chinese data center operator Chayora and plans to commit up to $180 million to the company as part of a Series C funding round. In August, Singapore’s GIC Private agreed to acquire an unspecified number of data centers in China through a partnership with specialist developer GDS Holdings.
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