CityFibre set to raise £900M to buy struggling broadband rivals
What's the deal? CityFibreDealroom has a profile for this one. Try Dealroom → is set to raise £900m in growth equity from shareholders including Goldman SachsDealroom has a profile for this one. Try Dealroom → and Mubadala, an Abu Dhabi sovereign wealth fund. The proposed capital injection has not yet officially closed — no final terms had been agreed as of late July 2026, and the new funding may be conditional on creditors accepting a haircut. The BT challenger plans to use the cash to fund acquisitions of smaller rival broadband providers, known as alternative networks or "alt-nets."
Why now? The company has struggled with rising interest costs on its debt pile, which stands at nearly £4bn. Fierce competition and slower-than-expected customer uptake have piled pressure on network providers, forcing CityFibre to seek fresh backing.
What's the endgame? CityFibre's full-fibre network reaches around 4.7 million premises, making it the largest alt-net and a key competitor to BT's Openreach. The proposed capital would help expand the network to more than eight million homes, with bosses targeting providers that own networks reaching more than one million homes, such as Hyperoptic and Community Fibre.
The raise, if completed, would rank among the very largest UK telecom growth equity rounds of the past four years — in the top percentile of 265 comparable deals. It follows a £1.5bn refinancing last year that the company said would last until mid-2027.
The layoffs: Financial pressures have prompted CityFibre to slow its network build-out to focus on acquisitions. It warned this month that 200 roles were at risk of redundancy, after earlier cuts that affected 450 roles at the start of the year.
What could go wrong? CityFibre estimates it will need £2.5bn to tide it over between 2025 and 2030, raising the prospect of more calls on its backers. A source close to the company said it was exploring a "limited" recapitalisation of its debt, potentially including a debt-for-equity swap or extending existing loans.
The signal: The broadband sector is consolidating fast. Virgin Media O2 struck a £2bn deal this year to buy Netomnia, the country's second-largest alt-net — a deal now facing an in-depth Competition and Markets Authority probe after CityFibre complained it would create a "cosy duopoly." A CityFibre spokesman said its shareholders are backing M&A to "rapidly expand to more than eight million premises and establish the third national network that this country needs."
Read more: Financial Times · Bloomberg
