Spring Fibre is on the brink of collapse after its key investors will no longer provide funding, according to reports in the Telegraph.
Originally set up to challenge BT, the Reading-based broadband business raised more than £150m to build a network for 1m homes across England.
After failing to find a new backer, it has filed a notice of intention to appoint administrators, says the Telegraph.
Spring Fibre began rolling out its network in 2021, targeting three areas in Lincolnshire, alongside wholesale services to key ISP.
However, following loss of funds from its main financial backer, Kingsley Capital Partners, the business is now facing administration.
The infrastructure division of River Global, the merchant bank, also pledged to invest up to £155m, but Spring Fibre bosses revealed last month that Kingsley Capital Partners would no longer provide funding for the network build or operational costs.
Its latest available accounts show a loss of £3.2m in 2022 on revenues of just £325,000.
According to the Telepgraph reports, the debts were far higher than the equity value – standing at almost £11m.
The collapse of Spring Fibre highlights the pressure many challenger broadband alt-nets face when they develop rival networks against BT, funded by billions provided by investors.
Rising interest rates have increased the cost of network rollouts, with many now facing collapse.
Gareth Greppellini, Chief Executive of Spring Fibre, said: “While we can confirm we’ve had a significant level of interest, we don’t have an offer that provides the necessary liquidity in the time we have available.
“Unfortunately, we have taken the difficult decision to file a notice of intention [to appoint administrators].”
