Photographer: Simon Dawson/Bloomberg

Soros-Backed U.K. Fiber Broadband Challenger Raises $130 Million

  • Hyperoptic to expand to 5 million British homes by 2025
  • Fundraising follows launch of government fund to back fiber

A broadband provider backed by Soros Fund Management has raised 100 million pounds ($131 million) of debt financing to drive an expansion of its U.K. full-fiber network to 5 million homes by 2025 in a further challenge to BT Group Plc’s Openreach business. 

Hyperoptic Ltd, already Britain’s largest residential provider of “gigabit” broadband, will use the money to bring its network to more towns and cities and to reach smaller sites than it currently can. Its service, which gives customers download speeds almost 30 times faster than the national average, currently passes 350,000 homes and businesses. Hyperoptic, which has so far been focused on large apartment blocks in London, aims to raise that figure to 2 million within the next 5 years.

Full-fiber broadband services are a key element of the U.K. government’s plans to develop digital infrastructure and boost productivity as the country prepares to leave the European Union. A 400 million-pound government digital infrastructure investment fund started this month is likely to benefit smaller players such as Hyperoptic, CityFibre Infrastructure Holdings Plc and rural-focused Gigaclear Plc. 

“Full-fiber is the gold standard of broadband connectivity –- and through companies like Hyperoptic, our commitment to world-class digital infrastructure for everyone in the U.K. is already becoming a reality,” Andrew Jones, a minister at the U.K. Treasury, said in a statement.

The financing round was led by BNP Paribas SA with ING Groep NV, Royal Bank of Scotland Group Plc and NIBC Bank NV also participating. LionTree Advisors LLC was the exclusive financial adviser. Hyperoptic previously raised 75 million pounds of funding, including 21 million pounds from the European Investment Bank, in 2016, and 50 million pounds from a private investment fund backed by Soros Fund Management in 2013.

Full-fiber broadband runs fiber cables all the way to customers’ homes, without using slower copper wires for the final stretch as Openreach does in most cases now.

Openreach also plans to expand its full-fiber services, and is consulting with communications providers about a national rollout. Openreach is targeting coverage of 2 million homes by 2020 and has said it could reach 10 million by the mid-2020s if it gets enough support from industry, watchdog Ofcom and government to justify the project.

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