Nebius, the publicly-traded European AI infrastructure company formerly known as Yandex N.V., has raised $700 million to fuel its U.S. expansion.

The financing came from “dozens of very well known investors,” Nebius CEO Arkady Volozh (pictured above) told TechCrunch during a press briefing today. While all the investors’ names will be revealed when the paperwork is filed with the Securities and Exchange Commission (SEC), the company is only disclosing three for now: existing partner and GPU giant Nvidia, Silicon Valley VC firm Accel, and asset manager Orbis.

The private placement will see Nebius issue 33.3 million Class A shares at $21, implying a 3% premium on the stock’s average price since trading resumed in October.

The fundraise comes some six weeks after Nebius resumed trading on the Nasdaq following a near three-year hiatus imposed due to sanctions against Russia-affiliated companies. The Netherlands-based business had been the holding company of Yandex, “the Google of Russia,” and after an extensive divestment process, it emerged as Nebius in July with plans to offer “full stack” infrastructure for AI companies.

In addition to its core cloud infrastructure business, Nebius runs a handful of additional businesses, including Texas-based autonomous vehicle company Avride; a Netherlands-based generative AI and LLM company called Toloka; and edtech platform TripleTen, based in Wyoming.

A capital-intensive plan

Nebius is adopting a hybrid approach to growing its footprint, involving a mix of co-location facilities (shared data centers) and its own “greenfield” sites built from scratch. But this is an expensive effort, which is why it’s now raising additional funding.

While Nebius competes with the usual cloud hyperscalers, it’s also up against well-financed private players such as CoreWeave, which also counts Nvidia as an investor. Notably, CoreWeave is in the midst of expanding from the U.S. to Europe, while Nebius is moving in the opposite direction, recently announcing plans for a new GPU cluster at a co-location in Kansas City. Nebius also added a co-location site in Paris to its roster, and it’s planning to triple the capacity of its own flagship data center in Finland.

After the fire sale of its Russian assets earlier this year, Nebius had around $2.2 billion in the bank already. However, it had ring-fenced a portion of that for a buy-back program in case any existing investors wanted to exit. After all, Nebius in 2024 is a totally different business from the Yandex N.V. entity that those investors had previously backed. The offer amounted to a repurchase of up to 81 million Class A shares at a maximum of $10.5 per-share.

In the six weeks that followed its re-entry to the public markets, however, Nebius’s shares have hovered around the $21 mark (give or take), meaning that existing shareholders have had ample opportunity to sell at well over the buy-back price. Thus, this offer is “no longer warranted,” according to Nebius, freeing up even more capital for the company as it expands its data center footprint.

The long and short of all this is that Nebius has in the region of $3 billion to build with, a figure that is still relatively low in terms of the cash required to build infrastructure at scale. That is why Volozh says the company is already looking ahead to raising more capital, be that equity or debt.

“Of course, we will have some revenues that will help, but we will need more capital to build quicker,” Volozh said. “It’s very capital intensive. Technology and capital are two components of this business — I don’t worry about the technology (side), and the capital, I think, we will be able to raise.”

It’s also worth noting that this renewed financial position means that Nebius has now spruced up its financial forecast, expecting to reach annualized run rate (ARR) of $750 million to $1 billion by the end of 2025. The company had previously forecast that figure between $500 million and $1 billion.

As part of the deal, Accel partner Matt Weigand will be joining Nebius’s board of directors, though initially he will only have observer status until he’s formally elected at the company’s annual shareholder meeting in 2025.