Broadband ISP Zzoomm Get £100m Oaktree UK Full Fibre Boost

Alternative UK ISP Zzoomm, which holds an ambition to cover 1 million UK homes with a 10Gbps capable Fibre-to-the-Premises (FTTP) network by the end of 2025 (here), has today secured £100 million from Oaktree Capital Management to fuel its future expansion.

The provider, which was setup by Gigaclear’s former founder Matthew Hare and is using ADTRAN’s XGS-PON technology, began their first rollout to 6,800 premises in the Oxfordshire town of Henley-on-Thames last September 2019 via their own in-house team of locally sourced field engineers (here).

Work on the Henley build is now nearing completion (due by the end of 2020) and as a result Zzoomm have been preparing their future deployment plan. The provider has talked about having a strategy of targeting smaller cities and towns like Hastings, Amersham, Weymouth and Huntingdon, as well as the suburbs of larger cities (e.g. London and Birmingham), which often follow later in the rollout plans for larger rivals.

Obviously, a larger deployment will require significantly more funding and that’s why today’s announcement is so important. As a result, the provider have been able to raise an “initial” £100m of equity from funds managed by Oaktree.

Matthew Hare, Zzoomm’s CEO, said:

“This investment from Oaktree is a clear endorsement of the ability of our experienced management team to deliver what customers want, on budget and on time.

Life’s too short for bad broadband. The lockdown has accelerated the change in working habits and boosted the demand for online entertainment and learning. Zzoomm has demonstrated that the unmet need for better broadband is satisfied by Full Fibre, and the need for this new infrastructure exists across the UK.

Our fast, robust service satisfies this demand. Residents and businesses across Henley-on-Thames love the difference that Zzoomm delivers to their lives.

We are targeting market towns that are currently stuck with the pedestrian speeds delivered over ancient copper cables.

This funding from Oaktree will enable us to bring our transformational services to many more homes and businesses, making sure that the UK is Zzoomming onwards.”

Pablo Velez, Managing Director at Oaktree, said:

“We are excited to partner with Matthew and the team of experienced industry professionals he has assembled to accelerate Zzoomm’s growth. Zzoomm’s wholly-owned, 100% fibre-optic, last-mile network provides the homes and businesses it serves with the critical infrastructure required to deliver the fastest, most reliable connectivity available in the UK today.

We look forward to leveraging our operating expertise and experience with growth platforms to support the team as they deliver on their twin passions for providing great quality customer service and building a valuable infrastructure-backed business.”

How far this new investment goes will depend upon a lot of highly variable factors, although if we were to assume a per premises build cost of around £600 then you might expect to get back over 160,000 premises for that level of funding (note: costs then rise disproportionately as operators move to target more rural areas). But this doesn’t consider other costs, such as support, office, datacentres etc.

On top of that we suspect that Zzoomm will no doubt seek to harness the Government’s variable rural gigabit broadband voucher schemes, which further changes the aforementioned estimate. In any case, we look forward to seeing where the ISP plans to build next.