Summary

• Connexin has arranged debt financing worth up to £35m involving Santander UK and PATRIZIA-managed funds.
• The capital supports a planned LoRaWAN smart metering rollout covering up to three million meters for existing customers, not a completed installation total.
• Ofwat has separately allowed more than £1.7bn for 10.4 million smart meters during 2025–2030, illustrating the wider industry's investment programme.

Hull-based connectivity business Connexin has arranged debt financing worth up to £35 million to expand the wireless infrastructure supporting smart water meters across Britain, providing additional capital for a network designed to help utility companies collect consumption data and identify potential water losses.

The transaction involves Santander UK and investment funds managed by PATRIZIA, with facilities intended to support Connexin’s existing smart metering contracts and continued deployment of its Internet of Things network.

Announced during October, with confirmation from financial adviser Cameron Barney Herbst Hilgenfeldt on 16 October, the financing is intended to support a planned rollout covering up to three million meters for existing utility customers. That figure describes the scope of the company’s plans, not a verified count of devices already connected to its network.

The headline £35 million also represents potential financing capacity rather than expenditure already completed. The announcement does not establish how much of the facilities has been drawn, the rate at which capital will be deployed or the timetable for connecting the full planned meter estate.

Network investment comes before service revenue

Connexin develops and operates connectivity infrastructure used by water companies, public authorities and business customers. Its smart water activities depend on a wireless network capable of gathering information from meters and delivering it to systems used for operational monitoring and analysis.

Those networks require investment before their full commercial value can be realised. Gateways, communications links and supporting platforms must be developed and maintained, while the revenue associated with connected devices may be received over the duration of long-term customer contracts.

That timing creates financing requirements for a business expanding its infrastructure footprint. A company can have contracted demand for services while still needing capital to install equipment and make connectivity available across the required locations.

The latest package combines term lending, working capital arrangements and the potential for additional borrowing. Published details describe a £10 million Santander facility, a £5 million revolving trade facility, £10 million of financing from PATRIZIA-managed funds and a further £10 million accordion facility.

An accordion facility allows borrowing capacity to increase under the relevant financing arrangements. Its inclusion in the headline package should not be interpreted as evidence that all the additional money has already been drawn.

Connexin’s adviser characterises the Santander arrangement as a first-of-its-kind financing structure for LoRaWAN infrastructure supporting UK water utility meters. That description is a claim made by the transaction adviser, not an independently verified finding about every comparable infrastructure financing agreement.

The package provides capacity for Connexin to continue meeting its customer commitments. Its eventual financial effect will depend on borrowing conditions, the costs of deployment and the revenue generated by the network as connections become operational.

Low-power connectivity supports remote metering

Connexin’s water infrastructure uses LoRaWAN, a long-range wireless communication technology designed for connected devices that transmit relatively small quantities of data while consuming limited power.

Smart water meters frequently operate in locations where a permanent mains power supply is unavailable or inconvenient. Low-power communication is therefore attractive because a device can send readings without requiring the power demands associated with more intensive data services.

A LoRaWAN network uses gateways to collect information from connected devices and pass it to systems where the data can be processed. For water companies, that information can include readings from individual meters and sensors distributed across a large geographical area.

The network must provide suitable coverage where devices are installed, and the data systems receiving the information need to associate each reading with the correct asset and customer account.

Connexin provides connectivity and related services to customers including Yorkshire Water, Northumbrian Water and South East Water. Its ConnexinOS platform is intended to help those organisations analyse the information collected from meters and sensors.

Remote readings can reduce dependence on manual collection, although the operational benefit depends on how consistently meters communicate and whether the information received can be integrated into existing utility systems.

An installed meter is not necessarily one that is already providing reliable remote readings. Devices may require activation, network coverage improvements or integration work before their information becomes useful to the operator.

Connexin’s planned expansion therefore involves more than counting physical devices. The performance of its communications infrastructure and data services will influence how much value utilities can obtain from the metering systems they deploy.

Consumption data can reveal water losses

Smart metering allows water companies to collect consumption readings more frequently than is generally possible with conventional manual meter collection.

Those readings can reveal changes in usage and help identify continuous flows that may indicate water escaping through a leak on a customer’s property.

The technology may also help utilities distinguish unusual consumption from established patterns, improving their ability to determine where investigations or customer contact are needed.

However, a meter does not directly repair a leaking pipe. Detecting an unexpected flow is only one step in reducing losses, followed by establishing the cause and taking whatever physical action is required.

The completeness and accuracy of data also affect the usefulness of these systems. Missing readings, communication failures or incorrectly configured devices can limit the confidence with which operators interpret consumption patterns.

Water companies therefore need to combine connected infrastructure with operational procedures that determine how suspected leaks are assessed and addressed.

Connexin’s business sits within that process by supplying the communications and information services supporting the meters, rather than necessarily manufacturing every device or carrying out every subsequent repair.

Regulation supports a much larger rollout

The financing arrives during a substantial expansion of smart water metering across England and Wales. Regulator Ofwat has allowed more than £1.7 billion for water companies to deliver approximately 10.4 million smart meters between 2025 and 2030.

That allowance is part of the regulated industry’s investment settlement and is entirely separate from the commercial financing arranged by Connexin. It should not be interpreted as an award of £1.7 billion to the Hull business.

Ofwat has also set targets for a further 17% reduction in water sector leakage over the 2025–2030 period, supported by additional allowances for activities such as pressure management, repairing leaks and replacing water mains.

Smart meters are expected to contribute by providing more detailed information about consumption and potential losses, but they are only one element of the industry’s wider leakage reduction programme.

The regulatory investment programme creates demand for installation, connectivity, data management and other services. Individual suppliers still need to secure contracts, deliver their components and demonstrate that their systems meet customer requirements.

Connexin’s existing contracts provide a basis for its current network expansion, although the announcement does not specify a completion schedule for all three million planned connections.

Commercial results depend on connected meters

Connexin’s strategy has become more focused on connected infrastructure following the sale of its full fibre assets to CityFibre in March 2025. The earlier transaction was separate from the latest financing arrangement and forms part of the background to the company’s present activities.

Alongside water utilities, Connexin operates other connected infrastructure services, including smart city projects for public authorities. Its adviser identifies Hull City Council among its public sector customers.

The water metering programme nevertheless provides the principal rationale for the new funding. Utility customers require infrastructure that can remain in service over extended periods, with continuing support for connected devices and their data.

Long-term contracts can provide visibility into future demand, but they also create operational obligations. Connexin must maintain adequate network coverage, support deployed equipment and manage the cost of servicing its commitments as the number of connections increases.

The announcement does not disclose detailed interest rates, repayment arrangements or forecasts for the profitability of the funded expansion. Those limitations prevent a firm assessment of how the financing will affect future financial performance.

For utilities, the success of connected metering ultimately depends on the availability of usable readings and whether operational teams can act on the information they receive. For Connexin, delivery will be measured through network deployment, active connections and the reliability of its services.

The company now has financing capacity to pursue that expansion, while the planned network rollout and its commercial results remain work to be completed.