June 13, 2002 -- -Managed hosting provider Inflow, Inc. has raised an additional $35 million in private equity financing, the company said today. The additional capital will be used to enhance the company's service offerings.
In capturing new equity funding, Inflow bucked a trend in which investors have been deeply reluctant to invest new funds in anything related to telecommunications or web hosting.
The investor group is led by venture capital firms Telecom Partners, Centennial Ventures and Meritage Private Equity Funds in Denver, Colo., and includes Inflow's existing investors, Spire Capital Partners, The Halyard Capital Fund, Stolberg Equity Partners and Cornerstone Equity Investors.
To date, Inflow has raised $297 million in equity capital.
"This financing, coupled with Inflow's recent restructuring, will bring the company to EBITDA positive by July 2002, establishing itself as a market leader," said Inflow CEO Art Zeile. "This kind of confirmation takes the question of financial viability off the table completely."
In May, Inflow announced the closure or sale of four of the company's 18 data centers, and laid off 230 of the Denver-based company's 380 employees.
The restructuring convinced Inflow's investors that the company is positioned for the long haul.
"Unlike most managed service providers, Inflow has continued to grow its business in a very tough environment, making it a smart investment for us," said Steve Schovee, managing member of Telecom Partners. "Inflow has created an automated service platform that gives it a huge advantage in this industry."
"Inflow has a culture that is unsurpassed in its focus on the customer," said Jack Tankersley, managing director of Meritage Private Equity Funds. "This concentration is infused in the organization at every level, making its customer loyalty extraordinary."
Inflow will maintain its existing footprint across the country, which will sustain all client operations and any new service offerings. The company has more than 650 customers including well-known brands such as Comcast, Seitel Corporation and Hoovers, Inc.