UK-based alternative network provider, CityFibre, has announced its need for additional funding to maintain its pace against competitors like Openreach. According to its recent financial statement for 2023, CityFibre anticipates that its current financial resources will be exhausted by mid-2025. In response, they are actively seeking new external funding sources.
CityFibre’s financial report highlighted, “As the Group and Company are reliant on securing further external funding which is not guaranteed, a material uncertainty exists.” This reliance introduces significant concerns regarding the company’s future operations and its ability to meet obligations.
Privately owned by Antin Infrastructure Partners, Goldman Sachs Asset Management, Mubadala Investment Company, and Interogo Holding, CityFibre is under pressure to secure new funds. The company has enlisted external advisors, Evercore, to facilitate this pursuit of additional debt funding.
Despite these funding challenges, CityFibre has reported impressive financial growth. The company saw its revenue surge to £99.67 million in 2023, a noticeable increase from the previous year’s £30.97 million. It also added 163,000 new customers, reflecting its expanding customer base.
CityFibre envisions itself as a ‘third infrastructure platform’ alongside Openreach and Virgin Media O2. It sees the market trends favoring consolidation among alternative networks, looking to play a central role in maintaining competitive dynamics.
CityFibre notes that, “Given the financial pressures on the market and specifically the challenges for smaller players to raise capital to support their growth, we believe that widespread consolidation of UK alt-nets is inevitable.” Their strategy aims to safeguard healthy competition and deliver value for UK consumers.
Amidst its financial pursuits, the company is in a “capital intensive phase” as part of a long-term investment strategy. Yet, 2024 marks a turning point with the company reaching EBITDA positive status, bolstering partnerships with Sky and earning government trust.
A CityFibre spokesperson commented, “2024 is proving to be a significant year for CityFibre: we are EBITDA positive, we’ve secured a long-term partnership with Sky and we’re a trusted partner of Government, which has awarded us £800m to connect rural communities to full fibre broadband as part of Project Gigabit.”
