DigitalOcean, a New York City-based Infrastructure-as-a-Service startup that “graduated” from the prominent startup accelerator Techstars, has expanded its European infrastructure by adding a second data center in Amsterdam.

The company has moved into a TelecityGroup's AMS2 facility in the city, according to a blog post on its website. It also has data centers in New York and San Francisco. Its New York provider is Equinix.

The new Amsterdam location offers an option that has been only available at its New York facility: shared private networking. The feature allows customers to set up a private network within a DigitalOcean data center to do things like database replication, storage and host-to-host communications. The key here is that traffic over this private network does not count toward the users' bandwidth costs.

DigitalOcean says its services are cheaper and better performing than the services offered by some of the leaders in the IaaS space. A cloud VM instance with 2GB of RAM and 40GB of disk space, for example, costs $20 per month in the DigitalOcean cloud, which is much lower than the cost of Vms with comparable RAM sizes but larger storage capacities offered by Linode.com, Amazon Web Services and Rackspace.

All three competitors are offering spinning disk as storage media, while DigitalOcean's disk space is solid state. Offering low-cost cloud VMs coupled with SSD storage is one of the key differentiating points for DigitalOcean.

The company said it will continue to “invest heavily” into infrastructure, adding more data centers around the world. “The company is currently exploring further expansion in locations such as the UK, sharpening their focus on adding more capacity throughout Europe,” its representatives wrote in the blog post.

In August, DigitalOcean announced that it had raised US$3.2m in seed funding from a group of investors led by IA Ventures. The group included Techstars and the venture capital firm CrunchFund.

Techstars, the accelerator that pushed DigitalOcean through its initial stages, has worked with more than 350 startups. Companies in its portfolio have raised more than $400m total.

The cloud provider graduated from Techstars' startup accelerator program in 2012.