Co-founders of Web Werks, Nikhil and Nishant Rathi, have made headlines with their recent exit from the data center industry, selling their entire stake to the American firm Iron Mountain for a staggering ₹1,400 crores. This strategic move marks a significant transition for the Rathis, who will now concentrate on their software business, NeoSOFT, and expand their technology platform, NeoNXT.
Strategic Sale to Iron Mountain
In a notable investment journey, Iron Mountain previously invested $150 million in Web Werks in 2021, followed by an additional $170 million in 2023. While the Rathis did not disclose specific details regarding the stake distribution from these transactions, this acquisition cements Iron Mountain’s commitment to the Indian data center market.
Timing Is Everything
Nikhil Rathi expressed his thoughts on the timing of their exit, stating, “We had the opportunity to remain involved longer, but it felt like the ideal moment to sell at the right valuation.” This decision aligns with the completion of three new data centers developed in partnership with Iron Mountain, showcasing a rapid growth trajectory in just 18 months.
- Three new data centers launched
- Customer acquisition completed in 22 months
Non-Compete Agreement
As part of the exit agreement, the Rathi brothers have entered into a non-compete clause, restricting them from holding more than 26% in any data center firm within India until the end of FY27. However, they are free to explore opportunities in markets like the Middle East, where the demand for data centers is on the rise.
Focus on NeoNXT and Mentorship
Looking ahead, the Rathis are set to channel their efforts into NeoNXT, a platform aimed at harnessing digital innovations and artificial intelligence. Nishant Rathi shared their vision, stating, “We are eager to lend our expertise and collaborate with investors, entrepreneurs, and VCs to nurture the next generation of business leaders and expand the data center landscape both in India and internationally.”
Expanding Iron Mountain’s Presence
With this acquisition, Iron Mountain bolsters its data center portfolio in India, now operating with 14 MW of capacity across six facilities located in Mumbai, Bangalore, Hyderabad, Pune, and Noida. The company has plans to develop three new campuses in Mumbai, Chennai, and Noida, which could potentially add 152 MW of capacity. This expansion is crucial for meeting the increasing digital and AI demands of customers across the region.
A Bright Future Ahead
Nikhil Rathi likened their aspirations for NeoNXT to the success of Reliance Industries’ Jio Platforms, highlighting their goal to revolutionize digital services. Currently, NeoSOFT employs 4,000 professionals, offering digital engineering and enterprise modernization solutions across various sectors, including hospitality, e-commerce, healthcare, manufacturing, and telecom.
As the Rathis embark on this new chapter, the landscape of the data center industry in India is set to evolve further, driven by innovation and strategic partnerships.
