Urban Media Wires $25M First Round

Urban Media Inc. closed its first venture capital round last Thursday, raising $25 million to establish itself as an on-site service provider.

The Palo Alto, Calif.-based company offers small and midsize companies Urban Media OnSite, which includes free broadband access, an e-business micro-portal and digital voice services. Chief executive Sean Doherty said the company partners with commercial office property owners and managers to install its services in office spaces.

“We have a national accounts team that negotiates national arrangements … with corporate headquarters of real estate companies,” Doherty said. “The next phase will be drilling down in each [region] over the next six to eight months building regional affiliation.”

Softbank Venture Capital and Accel Partners were the sole investors in the financing, proceeds from which will be spent deploying in-building and central switching facilities. Doherty said the company’s strategy is similar to a telecommunications company.

Therefore, Urban Media is negotiating a debt facility, and the company will probably raise as much as $1 billion in debt and equity financing over the next two years.

“At some point a public offering will be the right move to establish a transparent price to support equity coverage on debt financing,” Doherty said.

Currently, Urban Media has struck partnership agreements with Liberty Property Trust, Prentiss Properties and Trammell Crow Co. He said the company has initial deployments slated to begin this February in Chicago, Dallas, Detroit, Houston, Jacksonville, Los Angeles, Minneapolis, Philadelphia, San Francisco and Washington, D.C.