Nebius Secures $700M Funding for European AI Infrastructure

Nebius Secures $700 Million for U.S. Growth

Nebius, a European AI infrastructure company that previously operated as Yandex N.V. and is publicly listed, has successfully obtained $700 million in funding. This capital injection is specifically intended to accelerate the company’s expansion initiatives within the United States.

Investment Details and Key Backers

According to Nebius CEO Arkady Volozh, the funding round attracted participation from a substantial number of prominent investors. A complete list of these investors will be disclosed upon filing with the Securities and Exchange Commission (SEC). Currently, three key investors have been publicly identified: Nvidia, a leading manufacturer of GPUs; Accel, a well-known Silicon Valley venture capital firm; and Orbis, a global asset manager.

The financing was structured as a private placement, involving the issuance of 33.3 million Class A shares at a price of $21 per share. This represents a 3% premium relative to the stock’s average trading price since October when trading was reinstated.

Resumption of Trading and Company Transformation

This fundraising event follows approximately six weeks after Nebius recommenced trading on the Nasdaq exchange. Trading had been suspended for nearly three years due to sanctions impacting companies with ties to Russia.

Originally, the Netherlands-based company functioned as the parent organization for Yandex, often referred to as “the Google of Russia.” Following a comprehensive divestment process, the company rebranded as Nebius in July. Its current focus is on providing comprehensive, or “full stack,” infrastructure solutions tailored for AI-driven businesses.

Nebius’ Diverse Portfolio of Businesses

Beyond its primary cloud infrastructure offerings, Nebius oversees several other ventures. These include:

• Avride: An autonomous vehicle company located in Texas.
• Toloka: A Netherlands-based company specializing in generative AI and Large Language Models (LLMs).
• TripleTen: An edtech platform headquartered in Wyoming.

These additional businesses contribute to Nebius’ broader ecosystem within the rapidly evolving AI landscape.

A Significant Investment Strategy

Nebius is pursuing a combined strategy for expansion, utilizing both co-location facilities – essentially shared data centers – and constructing its own new, purpose-built “greenfield” sites. This approach, however, demands substantial financial resources, prompting the company to seek additional funding.

Nebius operates in a competitive landscape, facing not only established cloud providers but also privately funded companies like CoreWeave, which also benefits from investment from Nvidia. Interestingly, CoreWeave is currently extending its operations from the United States into Europe, while Nebius is taking a different path, recently announcing plans to establish a new GPU cluster within a co-location facility in Kansas City.

The company has also expanded its presence with a new co-location site in Paris and intends to triple the capacity of its primary data center located in Finland. These expansions demonstrate a commitment to growth.

Following the divestment of its Russian assets earlier this year, Nebius held approximately $2.2 billion in cash reserves. A portion of these funds was allocated for a share repurchase program, offering existing investors an opportunity to sell their holdings. This was necessary as Nebius in 2024 represents a distinct entity from the Yandex N.V. that earlier investors had supported.

The repurchase offer involved buying back up to 81 million Class A shares at a price not exceeding $10.5 per share. However, in the six weeks since Nebius returned to public trading, its share price has consistently remained around $21.

This performance indicates that current shareholders have had ample opportunity to sell their shares at a price significantly above the buy-back offer. Consequently, Nebius has determined that the repurchase offer is “no longer warranted,” thereby freeing up additional capital for its ongoing data center expansion.

Ultimately, Nebius now has around $3 billion available for development, although this remains a relatively modest sum considering the extensive capital required for large-scale infrastructure projects. Therefore, Volozh indicates the company is already planning future capital raises, potentially through equity or debt financing.

“While revenue generation will contribute, we will require further capital to accelerate our build-out,” Volozh stated. “This business is intensely capital intensive. We possess strong technological capabilities, and I am confident in our ability to secure the necessary capital.”

This improved financial standing has also allowed Nebius to revise its financial projections, now anticipating an annualized run rate (ARR) of $750 million to $1 billion by the close of 2025. Previously, the company’s forecast for this metric ranged from $500 million to $1 billion.

As part of this investment round, Matt Weigand, a partner at Accel, will join Nebius’ board of directors. Initially, he will serve in a non-voting observer role until his formal election at the company’s annual shareholder meeting in 2025.