DigitalOcean acquires Pakistan’s Cloudways in $350m deal

US-based DigitalOcean has inked an agreement to acquire Pakistani cloud hosting service provider Cloudways for $350 million in an all-cash transaction, according to a press statement.

DigitalOcean and Cloudways have been business partners since 2014. Together, DigitalOcean and Cloudways will serve over 124,000 customers paying over $50 per month, representing approximately 84% of the pro forma company’s total revenue.

The acquisition of Cloudways also increases DigitalOcean’s global employee base by 30%.

The acquisition aims to simplify workflows for small to medium-sized businesses that are looking for easier ways to build and scale their digital businesses. SMBs represent more than 50% of global gross domestic product (GDP) and spend $70 billion on cloud infrastructure today, the statement noted.

The transaction is expected to close in September and DigitalOcean is forecasting for Cloudways to contribute $13-15 million of revenue in fiscal 2022.

“For now, the acquisition will change very little for customers or the Cloudways brand. We intend for Cloudways to remain intact and operate as a standalone business unit under co-founder and CEO Aaqib Gadit,” said DigitalOcean CEO Yancey Spruill told DealStreetAsia.

Cloudways fills a specific gap in DigitalOcean’s product portfolio for those businesses that don’t want to or can’t manage their own infrastructure or DevOps, adds Spruill.

“The Cloudways team has built a very financially attractive business. Their team was considering strategic alternatives and has been a long-time and trusted partner, so the timing felt right for all those reasons,” Spruill noted.

Cloudways CEO Gadit said  “we have worked closely with the DigitalOcean team since 2014 and are now incredibly excited to officially be a part of the company.”

Cloudways provides onboarding and day-to-day management for SMBs looking to outsource their on-ramp to the internet. DigitalOcean simplifies cloud computing so builders can spend more time creating software that changes the world.

The acquisition of Cloudways expands DigitalOcean’s serviceable market within global SMBs and increases options for digital agencies, eCommerce sites, bloggers, freelance developers, and builders hosting on WordPress, PHP, and Magento.



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