GDS Holdings has raised $505m by selling shares to its investors Hillhouse Capital and ST Telemedia Global Data Centres (STT GDC).
Through a private placement, the shares were part of a newly issued set of Class A ordinary shares at $65 per share.
Hillhouse will buy $400m, bringing it to 3.9 percent ownership of the company, and STT GDC will buy $105m, increasing its ownership to 34.2 percent.
The transaction is expected to close in the next few days.
“I am very pleased to secure this capital to support our growth at a time when new IT infrastructure development in China is going to a higher level," William Huang, chairman and CEO of GDS, said.
“Furthermore, I am very pleased to have done it in a way that adds value to GDS and strengthens our shareholder base."
Bloomberg previously reported that GDS was considering selling more shares as early as this year. GDS is working with investment banks on the potential transaction, which could raise about $1bn for the Shanghai-based firm.
The Chinese company has been busy acquiring and building data centers across China, and said that it plans to use the newly-raised funds for future data center development and potential acquisitions.