Yotta looking to raise equity-based funding amid Nvidia spotlight

Sunil Gupta, co-founder and chief executive of Yotta, confirmed in an interview that the company will make an announcement on the matter “in the coming days”, and that it will “dilute equity holdings” for the funding sequence.

Gupta, however, neither confirmed nor denied plans for an initial public offering (IPO). Talks of the company’s funding efforts have reached the final stages, he affirmed, without clarifying if Yotta is taking a private equity or venture capital route—although at least two industry officials said that the possibility of an IPO filing could not be ruled out.

Last December, Yotta said it would source more than 16,000 H100 GPUs from Nvidia. Through this deal, Gupta told Mint earlier this year that the company is setting up its ‘Shakti Cloud’ platform, which will offer managed cloud services as well as the ability for enterprises to use Yotta’s cloud to train their AI models.

Gupta said that the deal is worth “nearly $1 billion”—and will be executed in staggered phases across at least two fiscals. “We have announced the overall outlay over multiple years, wherein payments will be executed over tranches as we receive supplies from Nvidia,” said Gupta. “We already have customers coming in for the first batch of GPUs that we received—the first 4,000-odd GPUs will be installed by the end of this month, and our services will go live in May.”

The fundraise efforts come at a time when Yotta has expanded its services through last year’s Nvidia partnership. A third industry official close to developments at Yotta, who requested anonymity, said that Yotta’sprimary promoter, the Hiranandani Group, “would not have the kind of deep pockets required to source GPUs from Nvidia in mass volume, in order to be taken seriously as a cloud platform that is capable of handling AI training workloads”, adding that it is therefore imperative for the company to seek a fundraising round. Yotta’s Gupta concurred.

“It is therefore imperative that the company seek a fundraising round in order to reach the kind of scale that they’ve targeted as of last year—even with a partnership from Nvidia,” the official added.

Yotta expects a second batch of 4,000 GPUs later this year, which will be installed in its Navi Mumbai data centre park. Following this, the rest of the GPU supply from Nvidia, which may include the new ‘Blackwell’ chips, will go into its Greater Noida data centre campus in UP, Gupta said.

Until FY23, Yotta has had a relatively muted journey. The company ended FY23 with net operating revenue of ₹103.7 crore ($12.49 million) and net profit of ₹2.7 crore ($350,000). With fresh performing targets for FY24, a fundraising round appears imminent.

Competitors to Yotta include Airtel’s Nxtra, NTT Global Data Centres, US-headquartered Equinix, Mumbai-based CtrlS, and others. India so far does not have a publicly-listed data centre operator, amid an increasingly growing market for data centre and cloud services for AI operations.

A December 2023 report by market researcher CBRE said that India’s data centre capacity grew 35% year-on-year (y-o-y) to 1.05GW at the end of last year, at a time when India’s internet user base stood at 1.24 billion, and smartphone penetration crossed 70% for the very first time. With increasing interest from startups developing AI models—including CoRover’s BharatGPT group, Sarvam AI, Vizzhy’s Hanooman large-language model (LLM) and more, demand for data centre and managed cloud services could grow further—a segment that Gupta’s Yotta seeks to capture over the next two fiscals.

The author is in San Jose to attend GTC 2024, on invitation of Nvidia.

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Published: 19 Mar 2024, 08:41 PM IST