Digital Edge Boosts Majority Stake in Indonesia’s Indonet With Buyout of Founders

Digital Edge has acquired the remaining shares held by the original founders of Indonesia’s PT Indointernet, upping the majority stake already held by the Singapore-based startup in the data centre operator known as Indonet.

The buyout of shares held by Toto Sugiri and the four other Indonet founders was funded through a combination of capital from Digital Edge and an external debt facility, the companies said Tuesday in a release without disclosing the deal value.

Digital Edge, which launched in 2020 with backing from US private equity firm Stonepeak, said the follow-on investment would help bolster service offerings to co-location clients by leveraging Indonet’s full suite of dark fibre, cloud and network service assets.

“We’re excited about the significant growth potential of Indonesia’s digital infrastructure market, with the domestic cloud and data centre sectors both predicted to see double digit CAGR of 28 percent in the coming years,” said Digital Edge CEO Samuel Lee.

Consolidating Position

In 2021, Digital Edge paid $165 million to acquire a controlling interest and become the largest shareholder in Indonet, which brought with it a 1,500-cabinet Jakarta facility now dubbed EDGE1.

In September of last year, Digital Edge announced the groundbreaking of a second Jakarta data centre, the 23-megawatt EDGE2, with 3,430 cabinets and a scheduled completion by the end of 2023. The second project is located less than 3 kilometres (1.9 miles) from the first facility in Jalan Kuningan Barat, the most carrier-dense area in the Indonesian capital.

The additional investment in Indonet is aimed at consolidating Digital Edge’s position in the market to enable the continued deepening of the fibre and connectivity services offered to the firm’s co-location clients.

“I have known Samuel and the members of the Digital Edge leadership team for more than a decade,” Toto Sugiri said. “I have greatly enjoyed partnering with them over the past few years to further our shared vision to enable Indonesia’s ongoing digital transformation.”

The Indonet founder voiced confidence that the Digital Edge team would “continue to take the business from strength to strength” and capitalise on growth opportunities in Indonesia’s digital infrastructure market.

Pan-Asian Platform

EDGE2 is Digital Edge’s third project in Southeast Asia, following a $100 million joint venture formed in 2021 with the Rufino clan’s Threadborne Group family office to build a 10MW data centre in Greater Manila.

Earlier this year, Digital Edge announced its entry into India via a joint venture with Singapore-based AGP Sustainable Real Assets and a state-backed investor to build a portfolio of hyperscale facilities, including a $2 billion project in Mumbai.

In June, Digital Edge began construction of its seventh Tokyo-area data centre as part of a joint venture with Japanese developer Hulic. Known as TYO7, the carrier-neutral facility in the capital’s downtown will rise on the site of the demolished Kobunacho Kinen-Kaikan Building, a 1982-vintage office block.

Backed by Manhattan-based Stonepeak, Digital Edge has more than $1 billion in deployed and committed capital and an established presence in Japan, China, India, Indonesia, South Korea and the Philippines.