I Squared Capital launches data center firm Saragon with $1B backing

Investment firm I Squared Capital has launched a new data center company called Saragon, backed by up to $1 billion in committed capital. The new platform has been seeded with ten data centers across nine US markets, acquired from Cogent earlier this year.

The portfolio spans Chicago, Atlanta, Phoenix, Los Angeles, Kansas City, Baltimore, Houston, Nashville, and Stockton, with approximately 53MW of installed power capacity and 259,000 square feet (24,060 sqm) of colocation space. Serving both retail and wholesale customers, the company said it aims to support high-density and liquid-cooled deployments as well as interconnection-rich environments for AI inference, content delivery, and hybrid-cloud workloads.

Saragon plans to "scale rapidly" through investment in its existing footprint, customer-led expansions, and additional acquisitions. The launch comes at a time when demand for edge capacity is accelerating across retail, enterprise, and wholesale colocation segments, as businesses increasingly bring compute closer to their users.

Steve Orlando has been appointed CEO of the new company. He joins from Seaborn Networks, where he spent nearly six years leading the operator of Seabras-1, the subsea cable system connecting Brazil and the United States. He has also held roles at 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," said Steve Orlando, CEO of Saragon. "AI inference is the newest driver, but the same fundamentals power content delivery, hybrid cloud, and mission-critical enterprise workloads. With a launch footprint spanning nine major markets across the country and the backing of I Squared Capital, Saragon is built to deliver that capacity where our customers need it most."

Founded in 2012, US-based I Squared Capital has assets worth $60 billion under management and is an investor in other digital infrastructure companies, including European data center firm nLighten, APAC data center operator BDx, fiber firms Exa and Lightstorm, and thousands of cell tower sites. In 2021, I Squared acquired Mexican data center firm Kio, and it acquired Brazilian operator Elea earlier this year.

The ten purpose-built facilities were originally developed in the 1980s and 1990s as switching sites to serve Sprint's legacy US long-haul fiber network. After Sprint was sold to T-Mobile in 2020, the facilities and network were sold to Cogent for just $1 in 2022. Cogent then announced plans to develop around 100 of the switching sites into colocation facilities, a conversion project that was completed earlier this year.

Originally set to offer colocation, Cogent later pivoted and planned to sell or lease the largest 24 facilities on a wholesale basis, keeping back a small portion of each facility for its own network needs. As of its most recent earnings results, Cogent had 185 Cogent data centers and Edge data centers totaling 2.1+ million sq ft (195,096 sqm), 40,954 racks, and 211MW. The portfolio includes 99 data centers and 86 Edge facilities.

The launch of Saragon represents a significant move by I Squared Capital to expand its footprint in the US data center market, leveraging distressed or underutilized telecom infrastructure to meet growing demand for edge and AI inference capacity. The backing of a major infrastructure investor positions Saragon to pursue aggressive growth through both organic investment and strategic acquisitions, potentially reshaping the competitive landscape in secondary US markets.