CityNet scores $275 million

CityNet, the fiber-optic infrastructure company that builds last-mile networks by sending robots through sewers, secured $175 million in second round financing and $100 million in debt financing.

The Carlyle Group led the equity funding. Berkshire Partners, Trimaran Capital Partners, Great Hill Partners and Fay Richwhite also participated. The $100 million debt financing is in the form of a line of credit that will be repaid.

A spokesman for CityNet said the money will be used to purchase equipment and build out CityNet’s fiber ring networks.

Founded in 1999, CityNet installs fiber-optic networks through a city’s existing sewer pipes using a Swiss-made, computer controlled-robot called SAM. The robot enables CityNet to map non-man-accessible sewer lines, which can be as small as eight inches in diameter, and drag conduit through the piping.

The company then leases the dark fiber to carriers and Internet and network service providers, and the cities in which CityNet is installing its network share in CityNet’s profits.

So far, deals have been struck with Indianapolis, Albuquerque, New Mexico, and Omaha, Nebraska. The first ring of the Albuquerque network is scheduled to be completed in the summer. Indianapolis and Omaha are in the design and engineering phase, the spokesman said.

According to CityNet, it has also signed an agreement with its first European city and an announcement is forthcoming. CityNet also is negotiating similar deals with about 28 other U.S. and European cities.

CityNet raised a $100 million first round of investment in April 2000 from Telecom Partners, Crescendo Ventures and CIBC Capital Partners. Telecom Partners and Crescendo participated in this latest round.