Fountain Partners grants $13m leasing line as DigitalOcean heads for London

Karl Alomar, COO of DigitalOcean, said the company began using an initial $3 million lease line of credit in 2013 — its first independent line for direct leases — to increase servers at its US data centers, which were straining to handle 30%-35% month-on-month customer growth. DigitalOcean can add more than 4,000 customer accounts for every $1 million worth of servers.

Karl Alomar 

“More recently,” Alomar said, “Fountain came in ahead of the pack again and offered another $10 million, becoming our first eight-figure line. Fountain recognized DigitalOcean’s need for international capacity with this lease line of credit that included $5 million for overseas expansion. 

“We had some international capacity before, but this was the first significant chunk of financing dedicated to international infrastructure. This helped us expand in Amsterdam and launch the Singapore data center this year with confidence.

“Fountain understood the business model and got into the weeds of the business model more so than other financing providers. They had good foresight, business understanding, and they knew the market well. They were able to see the opportunity.”

He added: “Fountain was more entrepreneurial in thinking… interested in the direction the company was going rather than just where it was.”

DigitalOcean currently has more than 200,000 users, six data centers, and plans for additional centers in cities including London. The company has raised equity capital from IA Ventures and Andreessen Horowitz.

Fountain Partners has become a trusted funding source by specializing in equipment leasing for venture, growth, and expansion-stage businesses.  By focusing only on financing fixed assets, the firm can complement any existing debt or equity capital structure and do so without requiring equity rights or blanket liens.

It considers investments in companies at any stage, from pre-revenue to large publicly traded companies sourced from a broad network of entrepreneurs, angel investors, venture capitalists, interim CFOs, equipment leasing brokers, venture debt funds and other traditional and non-traditional lenders and equipment leasing companies