Glasfaser Direkt has filed for bankruptcy following the decision of its major investor to pull out of the German fibre market, it emerged this week.

The German fibre network builder has filed an application to open insolvency proceedings, a company spokesperson confirmed to Heise Online.

Glasfaser Direkt was backed by UK-based infrastructure investor John Laing group, itself owned by KKR. John Laing has decided to cease investment in fibre in Germany, the spokesperson told the German news outlet.

It is not the first to make such a move. Last month Liberty Global-backed helloFiber changed its mind about rolling out fibre infrastructure in Germany and it too filed for bankruptcy protection. Essentially, the firm dipped a toe in the water and started deploying fibre last year, but decided against ploughing any further cash into the project. It seems that a change in macroeconomic conditions, including rising inflation and interest rates, and a lack of access to external capital, meant that the numbers no longer stacked up. The company also faced rising costs and a lack of construction capacity.

We don’t know whether these same factors are behind John Laing’s withdrawal from the market, but it’s a fairly safe bet.

As Heise Online notes, the climate for fibre network investments in Germany has cooled noticeably of late. Where once companies were throwing money at regional fibre projects, “investors are rethinking their strategies in the face of rising interest rates and higher construction costs,” it said, in a German language report.

That could have a knock-on effect on Glasfaser Direkt’s ability to find a new investor. The company said it is continuing with business operations and that it is on the hunt for a new backer.

Business news outlet WirtschaftsWoche got a similar response from Glasfaser Direkt, the firm talking up its new found “freedom” to carry on its fibre expansion plans with another investor. It’s difficult to see that comment as anything other than bravado though. However, that’s not to say another financial backer won’t come forward; despite the economic climate, infrastructure is still a draw to the investment community.

But much depends on the business model. According to WirtschaftsWoche, John Laing’s original intention was to invest €1 billion in the rollout of fibre in Germany, through Glasfaser Direkt. While that is a substantial sum by anyone’s standards, it perhaps insufficient to ensure economies of scale, particularly against the current backdrop.

Like some other European markets, the UK Being a prime example, Germany has seen a large number of relatively small-scale fibre builders spring up in the recent years, spurred on by a lack of early action by the incumbent. But there is such a thing as too many cooks when it comes to generating returns on deploying fibre.

It could well be that we’re seeing the start of a shake down in Germany.

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