Alphabet (NASDAQ: GOOG) is seeking external investment for GFiber, its WiFi and internet connectivity business that operates in parts of the U.S., as it plans to expand to more cities, Reuters reported. GFiber, owned by Google’s parent company, competes with larger internet service providers including cable companies Comcast (NASDAQ: CMCSA) and Charter Communications (NASDAQ: CHTR) and ILECs Verizon (NYSE: VZ), AT&T (NYSE: T) and Frontier Communications (NASDAQ: FYBR).
Since its 2012 launch in Kansas City, MO, GFiber now has operations in 23 cities in 16 states with another 13 cities being planned or under construction, according to its website. Without quantifying the total, the company says it has tripled its customer base in the past six years and has signed deals in 2023, to expand services to more than 25 additional cities, Reuters reported.
For GFiber to add customers and gain market share in most markets means it will face stiff competition from incumbent telcos and cablecos. It is interesting to note that GFiber is not established yet in five of the 10 most populated metro areas including New York, Dallas, Houston, Washington, D.C., and Philadelphia.
“This next step of raising external capital will enable [GFiber] to scale their technical leadership, expand their reach, and provide better internet access to more communities,” Ruth Porat, Alphabet’s president and CIO, said in a statement. Alphabet declined to comment on the amount of funds GFiber was looking to raise or the valuation it was seeking, although it has retained an investment bank to start the process of selling equity in the company, according to Reuters.
GFiber CEO Dinni Jain said in a statement: “We are now ready to scale this much faster.”
GFiber is one of Alphabet’s so-called Other Bets which comprise a portfolio of businesses other than Google that are at an earlier stage of research or commercialization. They include health company Verily and self-driving car business Waymo, both of which have raised money from outside investors.
In 2023, the Other Bets portfolio collectively lost $4.1 billion on revenue of $1.5 billion, primarily generated by internet and healthcare-related services, according to Alphabet’s annual report.
By John Celentano, Inside Towers Business Editor
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