Liverpool-based data center business AIMES Grid Services (AGS) has secured £3m credit through Santander’s Breakthrough program with £800,000 growth capital funding. 

It aims to use the funds to expand its data center capacity and create ten new jobs in the next two years.

AGS, which spun off from the University of Liverpool’s AIMES Center in 2006, creates and hosts cloud services for clients in the health, media, transport and financial services sectors.

It filled its first data center in 2012 and had created a second data center by 2013.

The Growth Capital funding is mezzanine-based finance at a low rate to help bridge the gap between debt and equity investment.

The scheme is intended to help fill the investment funding gap for UK companies with a turnover of under £25m.

According to AIMES Grid Services chief executive and founder professor Dennis Keyhoe, the fact that a high street bank is prepared to fund a data center business is a great indicator of confidence in the industry.

“Banks are not traditionally investors in data centers or the Cloud, and there was a lot of catching up for them to do here,” Keyhoe, who is also the R&D VC of the Data Centre Alliance, scaid.

Although technology companies offer high growth, they also represent high risk, he said, but the data center industry is the best of both worlds and could possibly attract more investment from the risk-averse sectors of banking.

“Data centers look like a safe infrastructure play and the types of contracts they sign are recognizable to banks, but the clients are in high growth sectors,” Keyhoe said.

Keyhoe said banks like Santander could offer better funding deals to the data center industry than venture capital.

“Interest from a bank might be a few points above LIBOR - London Interbank Offered Rate - while a venture capital company might want a return of around 30 %,” Keyhoe said.

“This is a good day for the data center industry.”

AIMES has been named as one of the Accelerate 250 - a select group of Britain’s fastest growing companies.