Netmagic to invest Rs. 100 crore

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Netmagic to invest Rs. 100 crore

Nets Rs. 80 crore from Fidelity, Nexus India to fund new data centers and possible acquisition

Tuesday, February 12, 2008

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CMN Bureau

BANGALORE, INDIA: Netmagic Solutions today announced that it would invest Rs. 100 crore this year to fund the setting up of four additional data centers, possible acquisition in the managed infrastructure space and brand building exercise.

Buoyed by a Series B funding of Rs. 80 crore from Fidelity International Limited and Nexus India Capital, Netmagic said a bulk of the investment would go on the four new data centers.

The company is planning to build the data centers at Mumbai, Chennai and Delhi to be housed on a total space of 100,000 sq. ft. Netmagic, a player in the data center, managed hosting and remote infrastructure management spaces, plans to put in the remaining Rs. 20 crore from internal accruals.

For acquisition the company is eyeing companies in India and the US. It is in talks with two companies, but has not zeroed in on any of them, according to Sharad Sanghi, chief executive officer and managing director, Netmagic.

Elaborating on the possible acquisition, Rajeev Gopinath, chief financial officer, Netmagic said, "Apart from acquiring a company, we are also looking to acquire a business of a company."

Sanghi added that the first of the four data centers planned by the company would come up in Chennai. Work on the Chennai data center would commence either this month or in March.

The data center in Delhi, where the company is still in the process of earmarking a space, is likely to be launched in January 2009. Currently, the company has four data centers – three in Mumbai and the other in Bangalore.

In the US, the company provides hosting from rented space. It also has a center in Pune, which primarily focuses on software development and R&D activities.

Sanghi also informed that the company would be looking to focus on R&D, remote infrastructure management and providing green data centers.

"We have a team that works on green data centers. We also take the help of consultants from outside," said Sanghi.

In 2000, the company had amassed a $4 million funding from eVentures, the venture fund, which was acquired by Nexus.

The company, which has over 500 customers, generates 90 per cent of its revenue from India.

Thought the current focus is on India and the US, Sanghi said the company is also looking at Europe and Far East. Netmagic is expecting 100 per cent growth this year, said Sanghi.

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