Arcadian Infracom, a St. Louis-based fiber infrastructure firm, said Monday it has secured $140 million in financing to move forward with construction of its first fiber routes.
New York-based financial services firm TIAA is making an equity investment in Arcadian that involves providing up to $140 million in financing, the startup’s co-founder and CEO Dan Davis said. Nuveen, an investment management firm that is part of TIAA, is overseeing the investment.
“Key tenets of our portfolio strategy include identifying exceptional growth opportunities, managed by best-in-class teams and executed through responsible investment strategies,” said Andrew Deihl, sector head of private infrastructure at Nuveen. “The long term investment focus of TIAA aligns well with the patience and focus required for success in building Arcadian’s new core long haul fiber infrastructure with a life cycle measured across multiple decades.”
Founded in 2018, Arcadian develops and operates long-haul fiber networks for use by technology companies and carriers. Arcadian's key focus is serving rural and tribal lands in an effort to boost broadband access in underserved areas. It has inked a partnership with the Navajo Nation, a 27,413-square-mile American Indian territory that covers parts of northeastern Arizona, southeastern Utah and northwestern New Mexico. Arcadian had previously announced seed funding rounds in 2020 and 2019.
Davis, who co-founded Arcadian with Derek Garnier, said his company “couldn’t ask for a better match” in TIAA. The 15-person startup spoke with dozens of investors as it sought financing, with Davis saying it needed a partner who had a long-term vision and could provide the large amount of funding needed to build out fiber routes. Davis said a route can cost $80 million to $100 to complete.
“Our routes take somewhere between three and five years from conception to completion. You’ll spend a year or two developing it and you'll spend a year and a half to two years building it. You really need a very long-term investor,” he said.
Arcadian said its financing from TIAA and customer purchase commitments will allow it to pursue the start of construction on its first fiber routes. Initial routes being targeted by the startup would run from Salt Lake City to Phoenix and Phoenix to Denver. Davis said the Salt Lake City to Phoenix route, which will span roughly 700 miles, is likely to have construction started first. While Arcadian doesn’t have a specific date for construction to begin, Davis said it could start near the end of this year or early 2022. Several variables, such as weather and permitting, are likely to impact when construction commences, he said. Davis noted that the fiber route involves working with 51 different permitting agencies.
“There’s a lot of logistical pieces that have to line up for that construction kickoff date,” Davis said.
The firms behind the deal
Houlihan Lokey — financial advisor to Arcadian
Bryan Cave Leighton Paisner — legal counsel to Arcadian
Greenberg Traurig — special counsel to Arcadian on American Indian law matters
Bank Street Group LLC — financial adviser to TIAA
Morgan Lewis & Bockius LLP — legal counsel to TIAA
Lewis Roca — special counsel to TIAA on American Indian law matters
CMA Strategy Consulting — market consultant to TIAA
Broadband Success Partners — technical adviser to TIAA
