DigitalOcean Expands Its Cloud Services Portfolio with $111M Acquisition of Paperspace
The acquisition aims to provide customers with simplified AI and machine learning offerings, enabling them to focus more on their core business operations.
Funding Round Info:
DigitalOcean, a cloud hosting provider, has acquired Paperspace, a New York-based cloud computing and AI development startup, for $111 million in cash. This acquisition marks a significant milestone in DigitalOcean's growth strategy, as it seeks to expand its portfolio with simplified AI and machine learning offerings.
Paperspace, co-founded in 2014 by Daniel Kobran and Dillon Erb, has a history of attracting investment from notable entities. Prior to the acquisition, the startup raised $35 million from investors including Battery Ventures, Intel Capital, SineWave Ventures, and Sorenson Capital. The company, which runs its own datacenters with custom-configured GPUs, initially focused on providing high-performance workstations for design, visualization, and gaming in the cloud. However, as AI entered the mainstream, Paperspace pivoted to focus on its AI offerings, launching a suite of tools designed for developing, training, deploying, and hosting AI models in the cloud.
DigitalOcean's acquisition of Paperspace is its first since 2022, when it bought Pakistani cloud hosting service provider Cloudways for $350 million, and its fourth since its public stock listing in 2021. The acquisition is seen as a strategic move to enhance DigitalOcean's AI capabilities and provide customers with more comprehensive cloud services.
About DigitalOcean:
DigitalOcean is a cloud infrastructure provider that offers cloud services to help businesses deploy, scale, and automate applications efficiently. Founded in 2011, the company provides developers with cloud services that help to deploy and scale applications that run simultaneously on multiple computers.
DigitalOcean is known for its simplicity and developer-friendly platform. It provides a robust set of features and services, including droplets, which are scalable compute platforms with add-on storage, security, and monitoring capabilities. It also offers Kubernetes-based container service, scalable and reliable block storage, and object storage that is performance-optimized and reliable.
The company's services are designed to simplify web infrastructure for software developers and their teams, allowing them to spend more time building software and less time managing their infrastructure. With its robust yet easy-to-use platform, DigitalOcean has become a popular choice for many startups and small to medium-sized businesses. DigitalOcean is headquartered in New York City with data centers worldwide.
About Paperspace:
Paperspace is a New York-based cloud computing and AI development startup that provides powerful computing infrastructure, complete with GPU acceleration, to power a range of uses from machine learning to virtual desktops. Co-founded in 2014 by Daniel Kobran and Dillon Erb, the company aims to accelerate the development of AI and machine learning through its advanced, yet user-friendly platform.
Initially, Paperspace focused on providing high-performance workstations for design, visualization, and gaming in the cloud. However, as AI and machine learning became more mainstream, the company pivoted to focus on these areas, launching a suite of tools designed for developing, training, deploying, and hosting AI models in the cloud.
Paperspace runs its own data centers with custom-configured GPUs, offering a robust platform for developers and businesses to run their applications. The company's mission is to make cloud computing more accessible and convenient, and it has become a popular choice for those in need of high-performance computing power. Paperspace has been backed by notable investors, including Y Combinator, and has raised significant funding to support its growth and development.