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Vapor IO will grow US footprint with $90m in new funding

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Vapor IO will grow US footprint with $90m in new funding

Vapor IO, a provider of edge colocation, networking and interconnection services, announced that it had closed a Series C round of funding for $90m from Berkshire Partners and Crown Castle, both of whom are existing investors.

Company executives said the funding would be used to build out its Kinetic Edge platform in more cities across the U.S. in 2020 and has a goal to have deployments in the top 36 US metropolitan markets over the next two years.

Vapor IO’s Kinetic Edge consists of a modular data center designed for rapid deployment and remote operation, along with a specialized server enclosure system called a “Vapor Chamber” that holds IT equipment. Unlike a traditional rectangular data center rack design, the Vapor design is cylindrical, allowing for placement of 150kW of IT load in six rack wedges. Heat is evacuated through a central chimney-like exhaust cell with a software-controlled fan, making for easier cooling system design compared to traditional racks.

Vapor IO’s Vapor Chamber

Currently, the company has deployments in Chicago, Atlanta, Pittsburgh, and Dallas with Austin, Boston, Charlotte, Columbus, Denver, Houston, Indianapolis, Las Vegas, Los Angeles, Miami, Nashville, Pittsburgh, Phoenix, San Antonio, San Francisco, Seattle and Washington D.C. on the list of planned cities targeted for buildout in 2020.

The company wants to have multiple Kinetic Edge deployments in each city that are networked together, allow customers to use these modular data centers as if they were a single logical facility. A part of that infrastructure is the recently announced Kinetic Edge Exchange service, which is a software-defined interconnection platform that allows customers to exchange internet traffic with other customers on the platform as well as with its own servers.

Analysis: Customer traction is key

One of the keys to raising money for later rounds is customer traction. Vapor’s original vision for 2020 was to have 100 deployments. While the market for edge data centers is expected to experience tremendous growth, there are also many many challenges associated with moving a new market forward.

That being said, Cloudflare, a provider of CDN and edge compute services, will be rolling out its services on the Kinetic Edge platform in the 36 cities where Vapor IO is planning expansion. Web companies or enterprises that want to deploy applications to the edge without buying and installing their own servers will have access to services such as Cloudflare Workers, a serverless “function-as-a-service” offering similar to AWS Lambda. These edge deployments are also used by Cloudflare to help block malicious activity close to the request source, rather than letting bad traffic reach a customer’s servers.

Cloudflare isn’t going to be exclusive to Vapor IO; the company has been publicly identified as a customer of EdgeConnex, another provider of edge data center services. EdgeConnex can be viewed as one of VaporIO’s competitors, though it has so far mostly competed at the aggregation edge with a larger critical IT load capacity of between four to 10MW of power. EdgeConnex has been talking about offering MicroEdge containers, which would have between 10kW to 1MW of capacity.

Looking ahead, one logical move to grow interest in its platform would be for Vapor IO to leverage interconnection to AWS Local Region cloud services to enhance performance and security for customers; another possibility is hosting AWS Outpost deployments at the Kinetic Edge facility to provide access edge cloud services for enterprises who might not otherwise buy into a relatively expensive rack of Amazon-specific gear.

Disclosure: The author is a member of the State of the Edge industry group, of which Vapor IO is a sponsor. Vapor IO is not currently an Edge Research Group client, however.

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