Megaport Raises A$200 Million to Acquire Latitude.sh and Accelerate India Expansion

Megaport Transforms into Global Cloud Player with A$200M Raise and Latitude.sh Deal

Megaport has long been viewed as one of the ASX’s standout technology performers, often compared to Cisco during its early 2000s golden era. The company recently raised A$200 million in institutional capital to fund the acquisition of Latitude.sh, a fast-growing compute-as-a-service platform, and to accelerate its network expansion in India. This marks a pivotal step for Megaport as it transitions from a pure network provider into a broader cloud infrastructure player. The deal not only strengthens its global reach but also positions the company to capture a larger share of the rapidly expanding NaaS and CaaS markets.

What are the Best tech ASX Stocks to invest in right now?

Check our buy/sell tips

Megaport Targets the Hybrid Cloud Boom with Strategic Latitude.sh Acquisition

This acquisition represents a major strategic turning point for Megaport. Known for its expertise in connecting data centers around the world, the company is now expanding into compute, positioning itself at the center of the hybrid cloud and AI-driven infrastructure economy. Megaport’s core business has focused on automating connectivity between data centers, cloud providers, and enterprises. Latitude.sh takes that one step further by offering automated, on-demand infrastructure. In simple terms, customers can now access computing power such as servers whenever they need it, without investing in physical hardware. By integrating Latitude.sh’s platform, Megaport can now enable both data connectivity and compute from a single dashboard.

Latitude.sh already serves more than 1,150 customers across 10 countries, providing bare-metal and compute services. With the Network-as-a-Service market growing at around 30% annually, according to Grand View Research, and global demand for compute capacity accelerating amid record capital investment, Megaport is expanding not just its value proposition but also its total addressable market.

Megaport Targets India’s Booming Cloud and AI Infrastructure Market

Megaport is now setting its sights on India, one of the fastest-growing digital economies in the world, fueled by rapid hyperscaler expansion and a surge in AI-driven workloads from domestic enterprises. According to IDC and NASSCOM, India’s public cloud market is projected to exceed US$17–20 billion by 2028, expanding at more than 25% annually. Data center capacity is also expected to triple by 2030, with over 1.3 GW currently under construction, based on research from CBRE and Cushman & Wakefield. India remains an underappreciated growth opportunity, quietly building the infrastructure needed to support massive digital transformation. Megaport’s move comes at the perfect time, Latitude.sh’s compute capabilities strengthen the company’s ability to serve this fast-evolving market and extend its value proposition to one of the most promising regions for cloud and AI infrastructure growth.

The Acquisition details

Megaport raised A$200 million through an institutional placement, issuing 14 million shares at A$14.30 each, a 6.5 percent discount to the prevailing market price. The funds will be directed toward three key areas: the acquisition of Latitude.sh, the expansion of Megaport’s India network, and general corporate purposes.

Commenting on the raise, CEO Michael Reid described the transaction as transformative, stating, “The acquisition of Latitude.sh and the accelerated network expansion in India create the automated global software platform where networks and compute converge to connect critical workloads. We are optimally positioned to scale and grow at the heart of the hybrid cloud and AI-driven future.”

The investor’s takeaway for MP1

The key takeaway for investors is that Megaport maintains strong fundamental underpinnings, particularly in its recurring revenue model. The company holds a healthy balance sheet with only A$13 million in debt and approximately A$100 million in cash, while operating and free cash flow margins have been improving, with FCF recently reaching around 21 percent. However, investors should be mindful of near-term risks. As Megaport deploys fresh capital to expand globally and integrate Latitude.sh, free cash flow could come under pressure, and additional debt may be required to sustain this growth phase.

Competitive responses are also worth watching, as major players such as Equinix, Packet (now Equinix Metal), and DigitalOcean may move aggressively to defend market share in the emerging compute-as-a-service space. Overall, while execution risk has increased, Megaport’s strong financial footing and expanding market opportunity position it well for long-term value creation if managed carefully.