KARACHI: New York Stock Exchange–listed firm DigitalOcean Holdings Inc is going to buy Cloudways — a Pakistani company that provides small and medium-sized businesses with cloud hosting and software as a service (SaaS) facilities — for $350 million in cash.

According to a company statement released on Wednesday, a significant portion of the consideration will be paid over a 30-month period following the closing of the transaction in September.

The size of the transaction will make it one of the biggest foreign acquisitions in Pakistan’s history. “The acquisition will simplify workflows for small to medium-sized businesses that are looking for easier ways to build and scale their digital businesses,” it said.

Cloudways is expected to generate “more than $52 million in revenue in fiscal 2022,” representing a three-year compound annual growth rate in excess of 50 per cent.

DigitalOcean and Cloudways have been close partners since 2014. Cloudways currently relies on DigitalOcean infrastructure to power approximately 50pc of its customers. Cloudways serves an international and growing customer base. Together, they’ll serve over 124,000 customers paying over $50 per month, representing approximately 84pc of the pro forma company’s total revenue.

Cloudways provides simple on-boarding and day-to-day management that is purpose-built for certain small and medium-sized businesses looking to outsource their on-ramp to the internet. The company helps such businesses offload the complexities of cloud infrastructure while letting them spend more time running and scaling their businesses.

Cloudways was co-founded by its CEO Aaqib Gadit — an electronics major from Karachi’s NED University of Engineering and Technology — in 2012 as a “fully bootstrapped next-generation multi-cloud managed application hosting platform”.

Mr Gadit didn’t respond to a request for comment.

Published in Dawn, August 25th, 2022