AetherGrid Digital Infrastructure — Business Model & Revenue Streams
The unit economics and annuity model, the value-chain positioning, the customer segments and anchor-tenant strategy and the per-MW build economics underpinning AetherGrid.
Section 5 · Business Plan
Business Model & Revenue Streams
The unit economics and annuity model, the value-chain positioning, the customer segments and anchor-tenant strategy and the per-MW build economics underpinning AetherGrid.
AetherGrid earns recurring, contracted revenue from five
complementary streams, more than 90% under long-term (3–15 year)
contracts with above-95% retention. The mix balances the annuity-like
stability of colocation with the scale of hyperscale leasing and the
high-margin stickiness of interconnection.
| Revenue stream | Share | Description & contracting basis |
|---|---|---|
| Colocation services | 40% | Rack space, cages and private suites leased to enterprises; multi-year contracts; the recurring base. |
| Hyperscale leasing | 30% | Dedicated capacity leased to cloud, AI and large enterprise tenants; 10–15 year anchor contracts; scale driver. |
| Interconnection services | 10% | Cross-connects, internet-exchange access and peering; high-margin, sticky, compounding with ecosystem density. |
| Managed services | 10% | Monitoring, security, remote hands and disaster recovery; value-added, retention-enhancing. |
| Edge computing | 10% | Regional distributed nodes for latency-sensitive workloads; the growth optionality layer. |
5.1 Unit economics and the annuity model
The economics are those of a capital-intensive annuity: high upfront
capital to build powered, cooled, secured shells and fit-outs, followed
by long-dated contracted lease revenue at rising margins as each campus
fills. EBITDA margin climbs from ~45% at first lease-up to ~58% at
maturity as fixed costs are absorbed across a growing revenue base.
Because more than 90% of revenue is contracted and retention exceeds
95%, mature-state cash flows are highly predictable, the defining
characteristic that qualifies data centres as infrastructure.
5.2 Value-chain positioning
AetherGrid operates across the full value chain: securing land and
power in scarce, well-located sites; developing and financing campuses
through ring-fenced SPVs; contracting construction under fixed-price
terms; owning the operating assets to retain the long-dated cash flows;
and managing the lifecycle to preserve uptime, availability and
interconnection density. Land-and-power access and interconnection are
where the moat sits; construction and some managed services can be
partially outsourced under performance guarantees.
5.3 Customer segments and anchor-tenant strategy
The customer base spans hyperscale cloud providers (the largest, most
creditworthy, capacity-hungry tenants), financial-services institutions
(residency- and uptime-driven), enterprises migrating from on-premise,
network and content providers building interconnection, and government
workloads under the data-sovereignty mandate. The commercial strategy
secures one or more hyperscale or financial-services anchor tenants per
campus ahead of or during construction to underpin lease-up, then layers
higher-margin colocation and interconnection around the anchor to lift
blended yield.
concentration
The revenue ramp assumes each campus fills on schedule after
commercial operation. This is the plan’s principal commercial risk:
powered shells earn nothing until leased, and early revenue tends to
concentrate in a small number of large anchor tenants, creating
counterparty concentration until the colocation base broadens. The
mitigations are pre-leasing anchors before energisation, staged capacity
release matched to committed demand, and the multi-metro footprint that
spreads tenant and market risk. Lenders should size the debt-service
reserve and covenant package against a slower-than-planned lease-up,
which the downside scenario (Appendix D) quantifies.
5.4 Unit economics, the per-MW build
The platform’s economics are best understood per megawatt of critical
IT load. A fully-fitted MW costs roughly R145m to build (land, shell,
electrical, cooling, fibre and security), and at maturity generates
approximately R72m of annual revenue at a ~58% EBITDA margin, an implied
EBITDA yield on cost that improves as campuses fill and fixed costs are
absorbed. The table sets out the illustrative build-up; actual figures
vary by campus, tenant mix (hyperscale wholesale vs retail colocation)
and density.
| Per-MW metric | Illustrative value | Note |
|---|---|---|
| All-in build cost | ~R145m/MW | Blended across land, shell, M&E, fibre, security |
| Mature annual revenue | ~R72m/MW | Blended colocation + hyperscale + interconnection |
| Mature EBITDA | ~R42m/MW | At ~58% margin |
| Lease-up period | 18–36 months | From COD to stabilised occupancy |
| Contract tenor | 3–15 years | Hyperscale longer; colocation shorter |
| Customer retention | >95% | High switching costs from interconnection |
Two features make this an attractive annuity. First, operating
leverage: because a large share of cost is fixed (the powered, cooled
shell), each incremental leased MW drops a high margin to EBITDA,
driving the 45%→58% margin expansion. Second, stickiness:
interconnection density means tenants that deploy rarely leave, so
mature revenue is durable and low-churn, precisely the profile that
supports a premium infrastructure exit multiple. The corollary risk,
addressed throughout, is that the powered shell earns nothing until it
is leased, so lease-up pace is the key value driver.
Confidential — this business plan is provided to prospective investors and lenders for evaluation purposes only and may not be reproduced or distributed without the written consent of AetherGrid Digital Infrastructure Holdings (Pty) Ltd.