I Squared backs Saragon with up to $1B for edge data centers

I Squared Capital launched Saragon, a data center platform seeded with ten US facilities acquired from Cogent earlier this year. The investment manager is backing the company with up to $1 billion in committed capital, according to Data Center Dynamics.

The portfolio spans Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville, and Stockton, California. Installed power is about 53 MW across 259,000 square feet of colocation space. Saragon says it will serve retail and wholesale customers and was built for high-density, liquid-cooled racks and interconnection-heavy workloads: AI inference, content delivery, and hybrid cloud.

The buildings began in the 1980s and 1990s as switching sites on Sprint's long-haul fiber network. Sprint was sold to T-Mobile in 2020; in 2022, the facilities and network were sold to Cogent for $1, Data Center Dynamics reported. Saragon bought the ten sites from Cogent earlier this year.

Steve Orlando, Saragon's CEO, joins from Seaborn Networks, where he spent nearly six years leading the operator of Seabras-1, the subsea cable connecting Brazil and the US. Earlier stops include Zayo, Level3, Verizon, MCI, and Global Crossing. "Demand for Edge capacity is accelerating across everything we do — retail, enterprise, and wholesale colocation alike — as businesses of every kind bring compute closer to their users," Orlando said in the announcement.

I Squared, founded in 2012 and US-based, manages about $60 billion. Its digital infrastructure holdings include European data center operator nLighten, Asia-Pacific operator BDx, fiber firms Exa and Lightstorm, and thousands of cell tower sites. It bought Mexico's Kio in 2021 and Brazil's Elea earlier this year.

The bet is on operating assets. The $1 price on Cogent's 2022 purchase was a transfer footnote, not a valuation. Saragon's ten buildings come with power, fiber, and operating history in nine metros. Greenfield data centers sit in interconnection queues and permitting calendars; Saragon is open. That is the edge pitch: distributed capacity close to users.

What the $1 billion buys next is the open question. The company plans to "scale rapidly" through investment in its existing footprint, customer-led expansions, and additional acquisitions, according to Data Center Dynamics. That likely points to buying more carrier-built facilities in more markets, the way Saragon was seeded. Competition for that inventory is real. Orlando's fiber and subsea background fits the brief.

Fifty-three megawatts is an edge-scale number — big enough to serve retail and wholesale tenants close to their users, small enough that the platform needs to grow. The next acquisition will say more than the launch did.