Dotcom darling Kelly returns to datacentre market
Telecity founder secures £4m from investors to kick-start new colo venture
DataCentred, a cloud services provider helmed by Telecity's Mike Kelly, has secured £4m from several investors including well-known venture capitalist Jon Moulton.
According to the fledgeling firm, this will fund a next-generation rollout of combined colo, datacentre and open-source cloud services, allowing DataCentred to complete its first site at MediaCityUK in Salford and continue developing its open-source platform.
Mike Kelly, founder and CEO of DataCentred, said the funding round is "hugely significant" for the two-year-old company itself as well as helping "rebalance" UK internet infrastructure in favour of the North.
"Our services offer clients the benefits of combining the shared approach of colocation with IaaS. This allows companies to change their proportion of self-owned computing machinery, flexibly and quickly, by using a cloud within the same facility," Kelly said.
According to Kelly, only 20 per cent of businesses use third-party datacentres at the moment, representing a "huge opportunity" for more operators to offer efficiency gains through outsourcing.
Also, about 90 per cent of UK internet traffic is currently routed through London - meaning potential latency, resilience, cost and continuity issues.
"With IDC forecasting a rise of 50 per cent in fixed internet traffic and a 13-fold increase in mobile internet traffic by 2017, the issues associated with this imbalance will only become more pronounced," he said.
The funding comprises £1m from the Greater Manchester Investment Fund - additional to an earlier £1m investment - £0.75m from Moulton's firm, £0.75m from the North West Fund, and £0.5m from DataCentred's Kelly.
The expansion plans are forecast to create about 270 jobs over the next five years in Greater Manchester, according to DataCentred.
Kelly, a chartered engineer with a PhD in high-energy physics, also founded pan-European datacentre network Telecity back in 1998 before the dot com crash. During the heights of the boom, it bubbled to a maximum £1bn market cap.
Today its market worth is believed to be £1.4bn, according to the Financial Times.
Jon Moulton (pictured, right), director of Perscitus Advisers, said DataCentred represents a "happy combination" of opportunity, high market growth, management commitment, and management capability.
"We look forward to our faith and early-stage commitment being rewarded by DataCentred's future success," he said.
Richard Young, spokesman at Enterprise Ventures, which manages the North West Fund for Venture Capital, said DataCentred will support the growth of other businesses through its provision of core services.
"We believe that DataCentred's innovative approach will enable it to grow rapidly and become a market leader, both in the region and beyond," Young said.
Guernsey-based Moulton was equal-465th on the Sunday Times Rich List 2013 with £170m. He founded investment firm Better Capital in 2010, after leaving Alchemy Partners in 2009 - a private equity firm that has been involved in turning around a number of distressed companies, including some in the channel.
He is also one of the backers of online peer-to-peer business lender Funding Circle.