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DigitalOcean gets $130 million credit line because servers are really expensive

TechCrunch TechCrunch 14/04/2016 Romain Dillet

Building a cheap cloud hosting platform like DigitalOcean requires a ton of money. The company has raised more than $120 million and is also securing credit every now and then to fuel its growth.

Despite the misleading name, the cloud is made out of servers. Buying servers and renting data center space aren’t cheap at all.

With 700,000 users booting up virtual private servers all the time across 12 data centers, the company must be managing a big army of rack cabinets.

In total, DigitalOcean users have booted up 13 million cloud servers. Sure, many of these servers have been shut down since then, but it gives a good idea of DigitalOcean’s scale.

This new credit line means two things. DigitalOcean is sill investing heavily in its infrastructure. Maybe existing users will get a performance upgrade with new servers replacing existing servers. Or maybe DigitalOcean will expand its product offering.

Second, while DigitalOcean is a great platform for small developers, grabbing bigger clients is a never-ending uphill battle with cloud hosting giants, such as Amazon Web Services and Microsoft Azure. If you want to tickle these giants, you need cash.

But it’s good to see that the startup managed to find banks that were willing to lend a substantial amount of money in today’s startup environment. They wouldn’t give money if they didn’t plan to get their money back at some point.

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