Cbeyond Communications, which provides a pure IP local phone network, says it has installed over 4,000 small to medium-sized business customers on its network since opening its first market just 18 months ago.

Cbeyond also has deposited $41 million in funding in connection with its initial $141 million investment commitment made in 2000. The company’s lead investor is Madison Dearborn Partners, and also includes Battery Ventures, Vantage Point Venture Partners and company management.

Last fall, Cbeyond bought most remaining accounts of Alpharetta, GA-based BroadRiver Communications, which shut down after spending $40 million in venture capital.

The latest investment in Cbeyond, which has an additional $240 million in private debt financing available, is expected to fund the operational costs of the company through profitability.

“Customers want what we’re selling,” Jim Geiger, chief executive officer and chairman of Cbeyond, said in a statement. “Our rapid acquisition and installation of more than 4,000 customers proves small businesses are looking for our affordable package of premium communication services.”

Cbeyond provides high-speed Internet access, local phone service and long distance via T-1 lines to business customers in Atlanta, where it is based, as well as Dallas and Denver. It is now installing some 1,500 T-1 lines each quarter across these three markets.

Now that it’s at full ramp in each market, Cbeyond says it is adding over 500 new customers onto its network every month.

Cbeyond’s latest funding of equity from its investors is expected to complete the financing needs of the company’s current three markets.

“Our strong record of success in growing the business while managing our costs effectively has given our investors the confidence to make this funding now – in a highly negative climate for telecom investment,” Robert Fugate, chief financial officer of Cbyeond, added. “We’re building a profitable business, and now we have the cash needed to reach that goal.”

Cbeyond: www.cbeyond.net