City Reach Raises $20 in First Round

If cyberspace is the final frontier, City Reach Ltd. hopes to be the leader in providing squatters in the telecommunications, Internet and content industries with secure co-location facilities as they colonize the globe.

The London-based company intends to invest the $20 million from its first round of venture financing in the first-phase rollout of 10 carrier-neutral co-location facilities in the next 18 months. Its first, a 60,000 square-foot facility located in Amsterdam, is scheduled to open later this fall.

Battery Ventures of Wellesley, Mass., led the Aug. 30 Series A round, which also included a commitment from M/C Venture Partners. No placement agent was used.

“Both investors have great experience in the Internet and telecommunications industries,” said Chief Operating Officer Ralph O’Dell. “They bring along substantial contacts in the industry.”

City Reach markets itself as an oasis for United States-based carriers and ISPs as they trek into regions of the globe that lack standardized security systems, first-line maintenance and account management. Its facilities, which will vary from 50,000 to 250,000 square-feet in size, are designed to encourage communications companies to adopt the City Reach standard of service rather than tending to maintenance issues in-house.

“A new ISP wants to enter a market as fast as possible,” O’Dell said. “If it spends four to six months developing its own equipment, it can lose millions of dollars in potential revenue.”

Battery invested from Battery Ventures V and The Battery Convergence Fund, which invests exclusively in companies supporting the convergence of telecommunications and data communications technologies.

“City Reach will definitely need additional financing,” said Battery Principal Tony Abate. “I see them coming back to the market as early as 2000 after building their first few facilities.”