Nebius, a publicly-traded European AI infrastructure firm previously named Yandex N.V., has successfully raised $700 million to drive its growth in the United States. This significant financial boost comes from a group of “dozens of very well known investors,” as stated by Nebius CEO Arkady Volozh during a press briefing today. While the identities of all the investors will be disclosed upon filing with the Securities and Exchange Commission (SEC), three names have been made public for now: existing partner and GPU giant Nvidia, Silicon Valley VC firm Accel, and asset manager Orbis.
Private Placement and Stock Details
Under the private placement, Nebius will issue 33.3 million Class A shares at $21 each, representing a 3% premium on the stock's average price since trading resumed in October. This move comes approximately six weeks after Nebius re-entered trading on the Nasdaq following a nearly three-year hiatus due to sanctions against Russia-affiliated companies. The Netherlands-based business, which was formerly the holding company of “the Google of Russia,” Yandex, emerged as Nebius in July with the aim of providing “full stack” infrastructure for AI companies.In addition to its core cloud infrastructure business, Nebius operates several other ventures. These include Texas-based autonomous vehicle company Avride, a Netherlands-based generative AI and LLM company called Toloka, and an edtech platform named TripleTen based in Wyoming.Hybrid Growth Approach
Nebius is adopting a hybrid strategy to expand its presence. This involves a combination of co-location facilities (shared data centers) and the construction of its own “greenfield” sites from scratch. However, this expansion comes at a cost, which is why the company is now seeking additional funding. While competing with traditional cloud hyperscalers, Nebius also faces competition from well-funded private players like CoreWeave, which has Nvidia as an investor. CoreWeave is expanding from the U.S. to Europe, while Nebius is moving in the opposite direction, recently announcing plans for a new GPU cluster at a co-location in Kansas City. Nebius has also added a co-location site in Paris to its portfolio and plans to triple the capacity of its flagship data center in Finland.After selling its Russian assets earlier this year, Nebius had around $2.2 billion in reserves. A portion of this was set aside for a buy-back program in case existing investors wanted to exit. The offer allowed for the repurchase of up to 81 million Class A shares at a maximum of $10.5 per share. However, in the six weeks since re-entering the public markets, Nebius's shares have been hovering around the $21 mark, providing existing shareholders with the opportunity to sell at a higher price than the buy-back offer. As a result, Nebius believes the buy-back offer is no longer necessary, freeing up more capital for its data center expansion.With approximately $3 billion at its disposal, Nebius is looking to raise more capital, whether through equity or debt. CEO Arkady Volozh emphasizes that while the company will generate some revenues to support its growth, it will still require significant additional capital to build infrastructure at a faster pace. “Technology and capital are two key components of this business. I am not concerned about the technology side, and I believe we will be able to raise the necessary capital,” he said.It is also worth noting that this new financial position has led Nebius to revise its financial forecast. The company now expects to reach an annualized run rate (ARR) of $750 million to $1 billion by the end of 2025, an increase from its previous forecast of between $500 million and $1 billion.As part of the deal, Accel partner Matt Weigand will join Nebius's board of directors. Initially, he will have observer status until he is formally elected at the company's annual shareholder meeting in 2025.
