Up-and-coming cloud service provider Lambda is gearing up to secure at least $350 million in funding as it lays the groundwork for a potential initial public offering (IPO) in 2026. Mubadala Capital is currently in discussions to spearhead this funding round. It's anticipated that the stock pricing in this round will be offered at roughly a 20% discount compared to the eventual IPO issue price.

This influx of funds will bolster Lambda's cash reserves, enabling it to move forward with its IPO plan, which was previously postponed and is now slated for the latter half of this year. The financing is structured as convertible bonds. In the event that Lambda fails to go public within one year, the company will be obligated to pay additional equity or cash interest. Meanwhile, investors will gain the opportunity to participate in the IPO.

Just a month ago, Lambda brought on board a former chief accounting officer to serve as its Chief Financial Officer (CFO), a strategic move aimed at getting the company IPO-ready. Lambda's performance in the public market may well be swayed by the prevailing market sentiment towards its competitor, CoreWeave.

Established in 2012 by the Baraban brothers, Lambda has carved out a niche for itself in the competitive cloud service landscape, primarily focusing on leasing dedicated servers. Between October 2024 and September 2025, Lambda reported revenues exceeding $520 million. Sales in the third quarter of 2025 witnessed an impressive 80% year-on-year growth. However, the company also incurred net losses amounting to approximately $175 million during this period. In 2025, both Microsoft and NVIDIA forged partnerships with Lambda, further solidifying its position in the industry.