Euro40m for CityReach

UK-based Internet hosting company, CityReach International, has secured euro40 million in a fourth round of financing from previous investors, Investcorp, Battery Ventures, M/C Venture Partners and JP Morgan Partners.

CityReach International, which currently operates eight high-security data centres, will use this fourth round of finance to accelerate the rollout of additional value-added services, such as managed storage services, managed servers and Internet access products across the company’s European network.

CityReach’s Secure Internet eXchanges (SiX) enables web-hosting providers, telecom, data communications and Internet companies to expand and enter new markets. The company supplies customers, including Universal Access, Novaxess, InterNap and Cidera, with secure facilities, a choice of bandwidth and network providers and a variety of customer services and support. The most recent addition to CityReach’s pan-European network, which currently spans London, Dublin, Amsterdam, Stockholm, Berlin, Munich and Budapest, is the Paris facility. Last week BT Ignite joined CityReach’s customer list announcing a deal for 40,000 sq. ft of the Paris location which is scheduled to open formally in June this year.

CityReach, which opened its first secure facility in Amsterdam last April, first received venture backing in August 1999 from Battery Ventures and M/C Venture Partners. The company’s aggressive European expansion has so far received financing to the tune of euro389 million, including a euro131 million senior credit facility agreed with Chase Manhattan and Merrill Lynch in July 2000. Philippe Costeletos of Investcorp, who led the third round of financing in September 2000, said: “We are delighted once again to be backing CityReach, which has delivered against its planned rollout of a network of the highest quality data centres across Europe and generated significant demand for its services.”

CityReach has also received the Cisco Systems AIP (Application Infrastructure Provider) designation in recognition of the quality of its infrastructure and associated services.

This latest euro40 million funding will also enable the final development of product suites in managed security services and database and transaction management services. Chief executive officer, Dr Sanjaya Addanki, said: “This additional round will enable us to become the preferred foundation for the Business Internet and to perform on our business plan, particularly with respect to our services offering.”

Other advisors on this financing include Fried, Frank, Harris, Shriver & Jacobsen, and Freshfields (for CityReach), and Gibson, Dunn & Crutcher (for Investcorp).