Challenger broadband firm CityFibre has rallied £1.1bn in fresh capital in its bid to muscle in on BT’s market share.
The London-based company has sold off its £825m stake to Interogo Holdings, the Swiss-based firm that bankrolls Ikea and Abu Dhabi sovereign wealth fund Mubadala, according to The Telegraph.
The figure also includes a £300m extension to CityFibre’s £820m bank loan agreements and will help the firm finance its plans to upgrade 8m homes to faster internet amid prime minister Boris Johnson’s push for better broadband.
Johnson’s plan should see 85 per cent of the country with access to the fastest full-fibre internet speeds by 2025.
Chief executive of CityFibre, Greg Mesch, said the fundraising was the “largest ever secured to support the UK’s full-fibre future”.
“This new capital will not only underpin our rollout to up to 8m homes across 285 cities, towns and villages, but will also enable our participation in the government’s ‘Project Gigabit’ programme to extend our future-proof infrastructure to rural areas and ensure no one is left behind,” he added.
“This capital raise is proof of the benefits of a truly competitive infrastructure market.”
Goldman Sachs-backed CityFibre has tabled deals with Vodafone, TalkTalk, Zen and the mobile operator Three UK, to upgrade the UK’s broadband from copper wires to full fibre.
However, the firm faces broadband heavyweights like BT and Virgin Media who have swallowed the majority of the country’s telecoms market.
Virgin Media O2 previously cautioned market regulator Ofcom that BT’s market dominance could be getting out of hand, slowing the country-wide full-fibre upgrade by bringing in unfair prices.
It comes as BT bolsters its workforce by an additional 1,000 staff outside of London, forming part of its ‘levelling up agenda’ across the country.