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Zayo Group, a bandwidth and infrastructure company

Zayo—which owns and operates fiber-optic networks across the U.S.—provides mission-critical bandwidth to carriers, web-centric companies, public institutions and enterprises.


In 2007, longtime telecommunications executive Dan Caruso—one of the co-founders of Level 3 Communications—joined forces with former Level 3 executive John Scarano and Matt Erickson to start Zayo Group. Their thesis was simple, but also very contrarian: Despite the widely held perception that there was a glut of Internet bandwidth and fiber-optic cable at that time, just a few years after the dot-com crash, Caruso and his co-founders believed demand for bandwidth was only going to increase–and there was a limited supply of bandwidth in many local markets. Laying new fiber is also very expensive, and the team felt that existing fiber assets in smaller markets were significantly undervalued.

So, Zayo set about raising capital so it could go on a buying spree to scoop up smaller bandwidth providers and create a large fiber-infrastructure company, capitalizing on economies of scale. Led by former General Partner Rick Frisbie and current Partner Alex Benik, Battery and a consortium of other investors provided Zayo the needed capital–$225 million–in 2007, and the company made more than 30 acquisitions between 2007 and 2014. The acquisitions included 360networks, which Zayo purchased in 2011 for $317.9 million, and AboveNet, acquired for $2.21 billion in 2012. Ultimately Caruso’s thesis proved correct, as demand for high-speed, Internet connectivity exploded along with the Internet economy.

Battery’s Impact:

  • Battery was a valued partner to Zayo from day one, leveraging our long history in telecom investing to make introductions to new executives and board members.
  • Battery served on the board and advised on issues around capital structure, including equity and debt


Zayo went public (NYSE: ZAYO) in 2014. Five years later, the company was acquired by global investment firms EQT Partners and Digital Colony Partners.

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The presented case study investment was made in particular economic and market conditions. There can be no assurance that Battery Venture would elect, or be able, to exploit similar opportunities in a similar manner under similar or different economic and market conditions. More generally, there can be no assurances that the Battery vehicles will have comparable investment opportunities in the future. No assumptions should be made that any investments identified above were profitable. It should not be assumed that recommendations made in the future will be profitable or comparable to the portfolio company described in this case study. For a full list of all Battery Ventures investments, please click here.

Focus area
Infrastructure Software
Boulder, CO

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