DayOne pushes ahead with a November IPO of up to $5 billion as data center listings hit a tougher market

Data center operator DayOne plans to make its U.S. IPO filing public in mid-October and list in November, raising as much as $5 billion at a valuation of about $20 billion, Reuters reported on Friday. The Singapore-based company, backed by Coatue and Hillhouse, runs sites in Malaysia, Hong Kong, Japan, Finland and Spain and closed a $4.5 billion Series C round in June.

It is moving forward in a week that went badly for its peers. SoftBank-backed SB Energy postponed formal marketing of its IPO, which Reuters said was seeking a valuation of about $60 billion, after questions from the SEC; Reuters also cited investor concern about the company's reliance on OpenAI as a customer. Earlier reporting, which we covered in our story on Texas's data center permit freeze, had pointed to pushback on the valuation. And Oracle's force majeure notice on its New Mexico campus, which we reported Thursday, put a spotlight on what happens when a site cannot get power on time.

The number investors will price: dollars per gigawatt

Reuters said DayOne has 2.1 gigawatts of secured capacity. On our arithmetic, a $20 billion valuation works out to about $9.5 billion per secured gigawatt, or roughly $9.5 million per megawatt. That is the yardstick the next few deals will be compared against, and it is only meaningful alongside a second number the prospectus will have to show: how much of that 2.1 gigawatts is already built, powered and leased, versus planned.

The $5 billion raise is also about a quarter of the target valuation, and it is slightly more than the $4.5 billion the company raised privately three months ago.

What the market is rewarding now

Reuters described a clear split in investor appetite. Operators with diverse customers, secured power, much of their contracted capacity already running or close to it, and long take-or-pay contracts can still raise money. Projects that lean on a single AI customer or need heavy spending before any revenue face harder questions. "The dividing line is whether demand is contracted and already energised, or only planned," Ke Yan, an analyst at Shenton Research, told Reuters.

For traders, it means the prospectus pages on customer concentration and power contracts will matter more than the headline gigawatt figure.

The pipeline behind DayOne

• Switch has filed confidentially and is expected to launch after DayOne, according to Reuters.
• Vantage Data Centers and CyrusOne are exploring listings, Reuters said.
• SB Energy remains in the queue; Nvidia has invested $1.5 billion in the company, per Reuters.

Rates are part of the backdrop. The 10-year Treasury yield ended the week at 5.17%, according to Treasury data, and data center projects are financed largely with debt. Reuters said higher interest rates threaten to narrow the window for these listings. A November debut would put DayOne into that window after next week's jobs and inflation data, and ahead of Switch, which Reuters said is expected to follow.

Sources: Reuters; U.S. Treasury daily yield data; earlier Chronicle reporting. Per-gigawatt and float figures are Chronicle calculations. This is market information, not investment advice.