Digital Ocean sets course for profitability after debt funding deal

a pile of cash

Dev-focused cloud provider Digital Ocean claims to have funded itself through to profitability after closing a deal for $300m in bank debt financing.

The funding was announced by newish CEO Yancey Spruill, in a blog post, which said the finance came from “a consortium of blue-chip commercial lenders, which increases the capital available for us to invest in building a business that supports the needs of developers, entrepreneurs, and small businesses around the globe.”

He added, “With this capital, which includes $100 million in funding from new lenders, we have fully funded our business to profitability and to reach our aspiration of more than $1 billion in revenue within the next five years.”

The company’s growth plans would remain focused on its core market of developers, as well as “entrepreneurs and small and mid-sized businesses (SMB), who, like developers, need simple solutions to help them get lift-off on their ideas.” Its active customer base stands at 500,000, half of which are businesses, he said. Just under two thirds of these come from outside the US, he added.

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“I promise that we will continue to scale our business in a way that not only supports these individuals and teams, but also helps them thrive,” he continued. “For our own team we are focused on continuing to invest and enhance our capabilities at DO to better serve our customers.”

Before the latest round of funding, Digital Ocean had raised just over $300m, in funding, according to Crunchbase, with the most recent round being in 2018. In the context of the mega cloud providers, this feels like small change.

While Digital Ocean has built out its operations to 12 datacentres worldwide, it has also been prepared to snap up acquisitions from time to time. In December, it swept up Scotch.io, pledging to make the tips and tutorials site “free to anyone”. In April 2019, it acquired application deployment and developer workflow automation platform Nanobox.

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