Metrobloks, the Los Angeles-headquartered digital realty company and urban data centre developer, is looking to further grow in the urban data centre space via a mix of joint ventures (JVs), acquisitions and greenfield projects, said CEO and founder Ernest Popescu.

Acquisitions could include real estate or industrial companies such as in the logistics sector, with good potential for data centre conversion, as long as they are located close to urban centres and energy providers, he added.

The company would spend EUR 10m to EUR 50m (USD 10.4m to USD 52m) per asset to convert such buys into datacentres, he said. Investment, including acquisitions or JVs, will be in Europe, including Italy and Ireland, and in a range of cities in the US and Canada, he said.

Metrobloks has also had approaches from would-be buyers for the whole company, but wants to create more value and proof of concept first, Popescu said.

“There’s been a lot of interest in the management team and in our properties and platform, but we still have runway to create further value without diluting ourselves.”

“However, we are interested in discussions with the right partners,” he added. The company is meeting with investors and is interested in various investment structures, Popescu added.

JV model

JVs are also being explored, with Metrobloks providing know-how and minority equity, while the other two parties in the JV might provide power sources and/or land, he said.

These investments represent an “IRR windfall,” he said.

“We’ve partnered with landowners and have presented them with the returns they can expect if they roll the land value into the vertical development. We are nearing expected multiples on invested capital (MOIC) of 4.5-5.0x in some cases on an already above-market land value which will snowball once we get permits for power and secure customer interest,” he added.

The company’s ethos is to build smaller, more accessible and manageable centres in prime urban locations. The data centres have IXP-grade connectivity, liquid cooling for up to 150kW/rack density, and room to scale for the most demanding AI use cases, and all at market-disrupting prices, said Popescu.

Earlier rounds

Metrobloks raised almost USD 6m in seed capital at a USD 22m valuation at the OpCo level in May 2024, with nearly USD 16m raised at the PropCo/SPV level for its first property in Miami earlier this year, he said.

Metrobloks is eyeing additional land/PropCo/SPV investments in Phoenix, Arizona; Queretaro, in Mexico and in Philadelphia, he said. It is also looking for institutional investors for a JV in a vertical development in Miami, totaling USD 160m, with a goal to break ground as early as mid-2025, he added.

The equity for these projects to date has come from private high net worth individuals or family offices and a mix of credit investors, Popescu said.

Asked about a company valuation, the founder conservatively estimated the company value based on the land assets, their permitted and powered market value of between USD 0.5-1.5M/MW Critical IT, as being between USD 100m-USD 200m.

“If we go vertical across the portfolio the company value is in the billions,” he said. Popescu is the controlling stakeholder, with Current Equity Partners holding 35% and Serena Capital, the French VC firm, with 10%.

The company projects to be profitable as early as 2027. The development cycle for data centres is 24-36 months. “So we’re well ahead of what’s usual,” Popescu said.

“Customers are coming to us almost apologetically to make sure we understand that they ‘only need 0.5 to 1.5 MWs of capacity.’ There is such a high need for enterprise capacity in urban metro markets that we are incredibly encouraged by the customer interest. And that extends to channel partners who are starved for inventory and looking to place their enterprise customers’ demand in our data centres,” the founder added.