Vultr Raises $329 Million in Debt from Leading Wall Street Banks
Cloud infrastructure provider Vultr announced it has secured $329 million in new debt financing, partnering with major Wall Street lenders to accelerate its artificial intelligence hosting capabilities. The syndicated credit facility includes participation from Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, KeyBank, and Wells Fargo.
While the precise interest rate was not disclosed, Vultr’s CEO J.J. Kardwell highlighted that the financing cost came at significantly lower rates than those observed in recent industry deals, underscoring growing lender confidence in the cloud infrastructure sector.
Lower Interest Rates Signal Investor Confidence
This debt raise comes amid a shifting landscape in cloud infrastructure financing. Earlier, a notable artificial intelligence-focused cloud provider managed to raise $2 billion in debt at a 9.25% interest rate, a decrease from over 14% in 2023 and 11% in 2024. Vultr’s new rates reportedly beat these figures by several percentage points.
Back in 2021, Vultr raised $150 million in debt from Bank of America and JPMorgan, and this latest round marks a substantial expansion of its capital base.
Meeting Soaring AI Demand
As AI applications surge, large cloud companies are investing tens of billions annually to build out their data centers. Unlike giant tech firms that boast ample cash reserves, smaller players like Vultr rely on external funding to scale up.
Despite remaining privately held, Vultr claims profitability—an edge compared to some peers. For instance, a rival AI cloud company reported a net loss of $314.6 million in Q1 on revenues near $982 million, carrying debt exceeding $8.7 billion.
A Growing Customer Base and Expanding Footprint
Founded in 2014 in West Palm Beach, Florida, Vultr has amassed over 1.5 million customers, many subscribing with modest monthly payments. The company operates 32 data center regions, predominantly outside the U.S., catering to a diverse global clientele.
In the competitive cloud space, Vultr faces players like Linode and others, while in AI infrastructure it competes closely with companies such as CoreWeave.
Strategic Partnerships and Future Plans
In December, chipmaker AMD joined Vultr in a $333 million funding round, valuing the company at a substantial amount, reflecting confidence in its growth trajectory. Vultr leverages AI chips from AMD and Nvidia, the latter being the market leader, to power its cloud offerings. Meanwhile, Nvidia-backed CoreWeave has seen a dramatic increase in market capitalization, currently valued around $88 billion.
Kardwell has indicated that Vultr continues to explore potential paths, including an initial public offering (IPO), but no definitive plans have been made public.
