Canbank Venture Capital Fund is investing 250M rupees (US$4.0M) in Indian data center services firm ESDS, enabling it to get started on a 200,000 sq ft (roughly 20,000 sq m) Mumbai facility.

ESDS Software Solution is planning to open the first phase of the data center in Navi Mumbai in April 2015. Canbank Venture is the subsidiary of public sector bank Canara Bank Ltd, and is investing through its Emerging India Growth Funbd according to Indian finance publication Livemint.

As we reported last month, ESDS is investing a total of about 3.35 billion rupees (US$54.3 million) to set up three data centers in India over a period of 24 months. This includes the Navi Mumbai site, a 100,000 sq ft (roughly 10,000 sq m) data center in Bengaluru and a 50,000 sq ft data center in Nashik.

High finance

The Navi Mumbai data center will cost 2 billion Indian rupee (US$32.4M), while the Bengaluru and Nashik data centers will see 1 billion rupee (US$16.2M) and 350 million rupees (US$5.6M) in investments respectively.

ESDS had earlier raised 100M rupees (US$1.6M) in debt from German international development bank KFW and Small Industries Development Bank of India (Sidbi) for the data centers.

“We see a good demand for data centers in the country, with the cloud now getting a good acceptance,” said Piyush Somani, managing director and chief executive officer at ESDS in an earlier statement. “Further, the growth of e-commerce, big data, Internet of Things and telecommunication among others would result in an increased need for data centers.”

Despite its position as a top offshore destination for IT and back-office services, data centers in India are faced with a number of challenges, including a lack of reliable power and other infrastructure bottlenecks.

In this instance, the inflow of investments towards ESDS’s data center is a positive sign that investors are convinced of the demand for the new data centers ESDS is building, and that the project is on track so far.