Interview with Zayo Group, Dan Caruso

Zayo Group ( recently raised a gigantic, $225M round of venture capital from a consortium of venture capital firms, to start a company focused on regional fiber optic networks. Dan Caruso is co-founder and CEO of the firm. Dan is a successful serial entrepreneur, and was most recently head of ICG Communications, which he sold to Level 3 in April of 2006. We spoke briefly with Dan yesterday get some insight into Zayo and its plans.

You've raised an impressive amount of capital, tell us what you are doing with it?

Dan Caruso: We've raised $225 million from 5 major equity investors, that took place a couple of weeks ago. What we are doing, is we are buying companies that have fiber networks around various points of the United States, and using those to offer bandwidth services to companies that need a lot of bandwidth.

Why pull together these companies -- I think you've acquired 4 or 5 companies so far, and I'd guess plans for others?

Dan Caruso: We have five companies right now. We may have others down the road. The Internet is becoming more and more integral to the way people live, and the way people work. Video is causing a dramatic increase in the capacity environment, and fiber is the underlying infrastructure.

This looks like a similar strategy to how you helped build Level 3?

Dan Caruso: I most recently led ICG Communications, and ICG had a very significant fiber footprint. What we learned in running ICG was that the bandwidth demand is getting very solid once again. Fiber networks have value. We ended up selling ICG to Level 3, and we thought that this was the type of business we really liked. We pulled the money to buy up others who still had fiber networks.

You've had quite a few successes in the past, why did you decide to start Zayo?

Dan Caruso: Good question. Business is my passion. I love to be involved with things, and I get a rush out of winning and not losing. If I don't have a business I can't get that adrenaline rush. It's more for the love of business.

What's been the biggest key to success for you?

Dan Caruso: I don't know. It's so hard to put a finger on it. It's been being in the right place in the right time, at in my case at a young age. I learned a lot from both the situations I was in, and the people I've been around. That's been so when it was hectic during the telecom boom, and before in other interesting things I've been involved in. Fortunately, I'm only 44 right now, and hopefully my best business years are still in front of me. I learned the easy way, from others, and the hard way, from making success. It helps to be lucky, and in the right place at the right time. I stumbled into the right things, and was able to benefit.