Warburg-Backed Evolution Data Centers Wins Investment From Abu Dhabi’s Zero Two

Abu Dhabi’s ADQ is entering Southeast Asia’s data centre market, with the sovereign fund’s Zero Two digital infrastructure unit taking a co-controlling stake in Warburg Pincus-backed Evolution Data Centers, according to a statement on Tuesday.

Zero Two’s investment in Evolution aims to provide long-term growth capital for expanding the firm’s hyperscale-ready data centre platform across Southeast Asia, according to the release from the Singapore-based investor and operator.

“Their (Zero Two’s) support marks a major milestone for Evolution Data Centres and will significantly accelerate our mission to deliver sustainable, high-performance digital infrastructure across Southeast Asia,” said Evolution CEO and co-founder Darren Webb, “Together with our investors and partners, we’re powering the next phase of digital transformation in the region.”

Zero Two is investing $325 million for its stake in Evolution, according to sources familiar with the transaction, with Warburg Pincus having set up a development JV with the data centre startup in 2022.

Green Data Centres for Southeast Asia

“Evolution’s strong market positioning and leading execution capabilities make it a compelling fit for Zero Two’s long-term capital deployment strategy,” said Zero Two chief executive Ahmed Al Hameli. “Together, we aim to accelerate the scale up of energy-efficient hyperscale data centres that meet the region’s rapidly growing cloud and AI demands.”

All of Evolution’s projects are set to be powered by renewable energy via power purchase agreements with leading renewable energy providers, according to the company. Late last year Evolution announced a memorandum of understanding to secure 100MW of power for a Manila project from Philippine stock exchange–listed Citicore Renewable Energy.

On its website Evolution pointed to the partial liberalisation of the Philippines energy market, which allows for power purchase agreements, as part of the market’s appeal. In Thailand, the renewable energy division of Thai energy conglomerate Banpu Public Company, Ltd (formerly Banpu Coal).

Growing Partnerships

“We see a high growth trajectory in modern data centre capacity at scale across Southeast Asia’s significantly underserved markets, where cloud and AI demand is rising rapidly,” said Warburg Pincus principal Andrew Fitzpatrick. “With strong execution capabilities and the backing of leading investors and trusted local partners, Evolution is uniquely positioned as an early mover and leading sustainable datacentre platform in the region.”

Since establishing its joint venture with Warburg Pincus three years ago, Evolution has taken on projects in Thailand, the Philippines and Vietnam, with the Thai and Philippine projects together representing to provide a total IT load capacity of 121 MW upon their completion.  

Warburg Pincus welcomed Zero Two as a partner in Evolution just days after US private equity firm Stonepeak announced the completion of a $1.3 billion investment in Warburg-backed Princeton Digital Group, a Singapore-based data centre platform which has established a network of 20 data centres across six countries in Asia Pacific.

In 2022 Warburg Pincus and PDG welcomed Mubadala Investment Company as a partner in that data centre platform, with the Abu Dhabi sovereign investor committing $350 million in equity to the venture.

ADQ, which was established in 2018 as the Abu Dhabi Developmental Holding Company before a 2020 rebranding, has around $251 billion in assets under management, according to fund tracking site Global SWF. In March this year ADQ announced a US-focused $25 billion partnership to generate power for data centres and AI.

ADQ set up Zero Two as its digital infrastructure development and investment platform in 2022, and since that time the company has deployed over 550MW of data centre capacity in its home market. The Evolution investment is Zero Two’s first in Southeast Asia.