Broadband startup Netomnia Ltd. has raised £230 million ($279 million) in debt to roll out its challenger fiber network against former state monopoly BT Group Plc.
(Bloomberg) — Broadband startup Netomnia Ltd. has raised £230 million ($279 million) in debt to roll out its challenger fiber network against former state monopoly BT Group Plc.
The committed debt financing will be used to build out networks for Netomnia and fund sister brand YouFibre, the company said in a statement on Friday. HSBC Holdings Plc, ING Groep NV, NIBC Bank NV, Royal Bank of Canada, Standard Chartered Plc, and the new government-backed UK Infrastructure Bank, agreed to provide the loans.
In recent years more than 100 entrepreneurs have started fiber optic networks across the UK, spotting an opportunity to connect people to faster internet connections. After a slow start, BT’s infrastructure arm, Openreach, has started building millions of fiber lines, and is trying to lure internet service providers with a new pricing offer, pending a regulatory review. Along with spiking interest rates and tougher fundraising conditions, that’s put the prospects of some challengers in doubt and fueled speculation about consolidation.
“The bar has risen significantly to raise capital in the current environment for fiber rollout, but the fundamentals around UK fiber investment remain strong,” Netomnia founder Jeremy Chelot said.
Netomnia, which raised £295 million in equity in a round led by DigitalBridge last year, has built a network that covers 410,000 premises and connects 28,000 customers. The company said it’s the fourth largest alternative network in the UK, after Goldman Sachs Group Inc.-backed CityFibre, KKR-backed Hyperoptic, and Warburg Pincus-backed Community Fibre.
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