Sources: Lensa AI backer exits Servers.com for $200M

A backer of the Lensa AI app, which sent AI-generated images from Stable Diffusion rocketing into mainstream social media, has just exited a company for a substantial amount of money, say well-placed sources speaking on the condition of anonymity.

CloudOne Digital has today announced its acquisition of Servers.com, a provider of “bare metal” services with data centers in North America, Western Europe and Asia, for an undisclosed sum. Servers.com was co-founded by Alexey Gubarev, a founder/parter of Palta, the company which backed Prisma Labs, the startup team that created Lensa AI. Palta has also created consumer mobile apps including period and ovulation tracker Flo, nutrition program Simple, Zing, an AI-powered personal fitness companion, and several others.

Well-placed sources have told TechCrunch that the exit was worth $200 million. However, neither CloudOne Digital nor Gubarev are revealing the acquisition price, other than confirming the exit.

Servers.com will now join the CloudOne Digital-owned “Liquid Web” family of brands, a holding company containing a number of multi cloud-based solutions.

Gubarev, a permanent resident in Cyprus, founded Servers.com in 2013, and Palta in 2016, together with Yuri Gurski and Alex Frolov.

Palta is  “studio” style investor that backs AI-driven startups and health apps. The Lensa AI app climbed the App Store charts last year with its “magic avatars” app.

Lensa cannily employed Stable Diffusion, an open source AI model that allows users to create images based on a training dataset comprised of billions of images collected from the internet. It reportedly made more than $70 million from the app in November 2022 alone.

It then ran into controversy when it was used to generate nudes based on the images it was fed by users, but later said it was working on a fix to prevent that.

Private equity firm One Equity Partners said Servers.com co-founders Nick Dvas and Konstantin Bezruchenko will join the CloudOne Digital leadership team. Dvas will be the president of Servers.com. Bezruchenko will run global infrastructure and procurement for CloudOne Digital.

Headquartered in Limassol, Cyprus, Servers.com says it operates 18 global data centers with over 3,000 customers worldwide.

The company focuses on “Infrastructure as a Service” for companies with large, persistent workloads such as video gaming, fintech, adtech, IT services, sports tech and a number of web3 applications.

In a statement, James F. Geiger, CEO of CloudOne Digital said: “The acquisition of Servers.com fits squarely into a larger multi-cloud capability strategy that is planned through CloudOne Digital.. and adds services for mid-market customers who have highly persistent, compute-intensive workloads.”

Gubarev has recently become a big advocate for the Cyprus tech ecosystem, but as a former Russian citizen and now citizen of Cyprus since 2002, he has occasionally had to defend himself against charges of association with his former home.

In 2020 Gubarev sued BuzzFeed in a U.S. court for implying server infrastructure run by a company he owned (XBT) had been coerced into helping the “Methbot” scam which allegedly acted in the service of Russia’s main domestic security agency, the FSB. That lawsuit was ultimately thrown out. Lawyers for Gubarev and XBT executives claimed they were in fact “unsung heroes” having canceled the Methbot account in December 2016 and preserved hard drives as evidence for the U.S. justice system.