Indian data center firm Yotta is to go public on the Nasdaq via a SPAC merger.
Nidar Infrastructure Limited, of which Yotta is the data center unit, and Cartica Acquisition Corp this week announced that they have entered into a definitive agreement to merge.
Nidar describes itself as “India's leading data center provider for artificial intelligence and high-performance compute.”
The company says it offers IT infrastructure and solutions on an "as-a-Service" model to customers, including colocation, managed, cloud, and AI services. The pre-transaction equity value of Nidar implied by the Business Combination terms is approximately $2.75 billion.
Yotta Infrastructure is the data center unit of Nidar and its parent company, Hiranandani Group. In Cartica’s SEC filings, Yotta Data and Cloud Limited is listed as a wholly owned subsidiary of Nidar.
"Through its Yotta data centers, Nidar is India's leading data center provider for AI and high-performance compute. Yotta designs, builds, and operates Tier III and IV data centers in India, which offer both colocation and hyperscale services and cloud and managed services,” said Sunil Gupta, CEO and co-founder of Nidar (and Yotta). “With our priority access to industry-leading GPUs through our partnership with the world's leader in high-performance compute, together with the added ability to access US capital markets, Yotta is poised to capture long-lasting demand from cloud infrastructure and AI."
Founded in 2019 by former NTT and Reliance exec Sunil Gupta, Yotta offers colocation and cloud services. The company has three live data centers in Navi Mumbai, Noida, and Gujurat, with sites in development in Pune, Powai, and Chennai in India, and Dhaka in Bangladesh. A facility is also planned in Nepal.
According to an investor presentation filed by Cartica, Yotta currently has 33MW of live capacity, with potential development up to 890MW. It has 16,000 Nvidia H100 GPUs on order (around 850 delivered) and plans to acquire another 16,000.
Darshan Hiranandani, co-founder of Nidar and director of Nidar's largest shareholder, added: "Nidar's management team has significant experience in successfully building and operating India's leading data center provider. By combining with Cartica, this will enable our management team to continue to execute on our growth strategy to effectively build on Yotta's world-class platform, accelerate growth, and create long-term shareholder value."
Nidar Group is a real estate firm owned by Niranjan Hiranandani and led by Darshan Hiranandani, also CEO of Hiranandani Group and co-founder of Yotta Infrastructure.
SPACs are shell companies that list on the stock market. These ‘blank check’ companies have large amounts of capital and the specific aim of merging with an operating company. Investors group together and fund (also called sponsoring) a SPAC which then goes through an IPO; the SPAC then finds a target (known as an operating company) and merges with it, allowing the target company to go public quicker than a traditional IPO.
Cartica is a SPAC set up to merge with a company in the technology space. It went public on the Nasdaq in January 2022 in a $230 million listing. The company is led by CEO Suresh Guduru, also CEO of IT services firm Softengg Inc.
Guduru said: "Our partnership with Nidar is reflective of our belief in the opportunity in technology infrastructure, Compute as-a-Service, and India's role in the global technology ecosystem. Under Sunil's leadership, we believe Yotta has positioned itself at the forefront of the global AI movement."
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According to the investor presentation, Yotta posted $15 million in revenue in 2023 and a EBITDA loss of $12.3m. The company expects $44.6m in revenue and EBITDA of $7.4m this year.
GLC Securities LLC served as financial advisor to Nidar. Allen Overy Shearman Sterling US LLP, SNG & Partners and Vale Law served as legal counsel to Nidar. BitOoda Technologies, LLC served as M&A Adviser to Cartica. Morrison & Foerster LLP, Khaitan & Co, Appleby (Cayman) Ltd., and Appleby (as Mauritius legal counsel) served as legal counsel to Cartica. Imperial Capital, LLC and BitOoda Technologies, LLC are serving as co-lead placement agents for additional capital-raising activity in connection with the combination.
Companies that have gone public via SPAC mergers include Cyxtera (which later filed for bankruptcy and was acquired by Brookfield); quantum computing firms D-Wave, IonQ, and Rigetti; ISP Starry (which also later filed for bankruptcy); and Vertiv.
