Economy14:43 · 42m ago

Israeli Institutional Investors Commit Over $1 Billion to Global Data Center Operator EdgeConneX

Globes

Translated & summarized from Globes by baba

Key points

01Israeli institutional investors invested about $1.03 billion in EdgeConneX’s recent funding round.
02EdgeConneX operates over 90 data centers worldwide, serving top AI and cloud companies.
03Tech giants are projected to spend $5.3 trillion on data centers by 2030, per Goldman Sachs.
04Migdal led Israeli investments with $350 million, alongside Meor, Meitav, and Clal Insurance.
05EdgeConneX was acquired by EQT in 2020 for $2.5-3 billion and has $80 million annual revenue.
06Investors see EdgeConneX as a growth company that may become a dividend-yielding REIT in the future.

In this story

People

Roni Zakai, Nir Turner, Tzachi Nahmias, Moshe Lesman, Randal Brookman

OrganizationsEdgeConneX, Migdal Insurance, Meor Investment House, Meitav, Clal Insurance, Canadian Pension Plan Investment Board, EQT, Goldman Sachs

PlacesIsrael, United States, Sweden, Canada

The story · English

The surge in artificial intelligence (AI) has driven massive investments in data centers worldwide, with tech giants expected to spend up to $5.3 trillion on these facilities by 2030, according to Goldman Sachs. Israeli institutional investors have notably joined this trend, collectively investing approximately $1.03 billion in the latest funding round of EdgeConneX, a leading global data center operator.

EdgeConneX, founded in 2009 and acquired in 2020 by Swedish investment firm EQT for $2.5-3 billion, operates over 90 data centers across more than 20 countries, including Israel. Its clients include major cloud and AI companies such as Nvidia, Google, Microsoft, and Oracle. The company’s annual revenues are estimated at $80 million, with significant growth potential ahead.

Among the Israeli investors, Migdal Insurance led with a $350 million investment, followed by Meitav with $250 million, Meor Investment House with $330 million, and Clal Insurance with $100 million. These investments represent about 15% of EdgeConneX’s total funding this year, which amounts to roughly $6 billion. The Canadian Pension Plan Investment Board (CPPIB) also participated with a $1.75 billion investment.

Migdal’s Roni Zakai highlighted the strategic importance of investing in a seasoned global operator with diversified international exposure and strong long-term contracts, which mitigates risk despite the sector’s inherent uncertainties. Meitav’s Nir Turner emphasized the strong demand exceeding supply in the hyperscale data center market and expects EdgeConneX to eventually stabilize as a dividend-yielding real estate investment trust (REIT).

Israeli real estate and infrastructure companies have increasingly entered the data center sector, reflecting the global AI-driven demand. This includes firms like Mega Or, Azrieli, and renewable energy companies such as Solair. Institutional investments in data centers have grown significantly, with Migdal doubling its total exposure to about 2 billion shekels and Clal Insurance holding hundreds of millions in direct and debt investments in the sector.

The data center market remains competitive and dynamic, with investors cautious but optimistic about the long-term growth prospects fueled by the AI revolution and expanding cloud computing needs.

Read the original at Globes