Key Takeaways
Fast-growing cloud provider Vultr just secured $329 million in new financing to expand its global cloud and AI footprint. The deal includes $255 million from several banks with approval to borrow up to $35 million, plus $74 million to lease equipment.
It looks as if Vultr is going after high-performance workloads that usually land with the Big Three. After 11 years, its CEO, J.J. Kardwell, said he hopes Vultr will become the independent cloud alternative to the hyperscalers.
This is no pipe dream; it’s one Kardwell has been emphasizing for years. In an interview from 2021, Kardwell said Vultr is “really focused on making cloud infrastructure accessible and affordable all around the world.”
“AWS, Azure, and Google Cloud all built these massive platforms, with a focus on the largest enterprise customers. Only now are people realising that they can be overpriced and over-complicated for smaller businesses,” Kardwell explained. “For many developers and businesses, these Big Tech clouds are simply overkill compared to what they actually need.”
Who’s Rethinking the Cloud?
In 2020, GEICO spent more than $300 million a year running 80% of its workloads across multiple cloud providers. Not long after, the company said cloud storage and AI workloads had become too expensive. By 2024, GEICO pulled back and built its own infrastructure with open-source hardware.
Software firm 37signals had a similar wake-up call. In 2022, it announced plans to migrate off AWS and Google Cloud because of high cloud costs. A year after moving off the public cloud, it estimated savings of $1 million. Fast forward another year, and it had cut its annual cloud bill by nearly $2 million.
Such significant cases may be few and far between — but even so, the writing is on the wall: High-revenue companies are getting fed up with burning millions on cloud infrastructure, and they’re starting to look for other options.
So when a hypergrowth company like Vultr says, “We’re cheaper than AWS/GCP/Azure — and we work just as well,” it prompts some speculation on whether the Big Three monopoly is set to hit an eventual wall.
Looking at it through a wider lens reveals the broader problem: Flexera’s 2025 State of the Cloud Report found that 84% of organizations say managing cloud spend is their top challenge.
Most of these organizations aren’t bringing in millions in revenue, which makes unexpected charges hit that much harder.
And it makes sense. Autoscaling is a major selling point, but it’s also why cloud costs are unpredictable by nature. But that doesn’t mean the cloud itself is inherently expensive. A lot of people moved from on-prem to the cloud because of the scalability and cheaper pricing tiers.
The real problem is how easy it is to misuse, especially without a dedicated IT team (which, of course, is expected with SMBs and startups with small dev teams). That’s why Vultr’s playing it smart here — it’s going after cost-conscious companies and hosts by calling out the biggest pain point in cloud hosting.
Vultr, for example, uses fixed monthly pricing. AWS and GCP follow a pay-as-you-go model, which makes it way too easy for a bill to double without anyone noticing.
For hosts who depend on hyperscalers and simultaneously find themselves juggling costs and scale, it may be time to start looking beyond the usual names.
