Wireless internet company Starry shows growth, looks to complete merger to go public

Internet service company Starry, which plans to go public soon, steadily increased its paid subscriber base last year, though it remains a pipsqueak compared to rivals like Comcast, Verizon and Charter.

In a meeting with investors Tuesday ahead of the planned merger with a special acquisition company, or SPAC, Starry said it had 63,230 household subscribers at the end of 2021, an increase of 83 percent from a year earlier. And the Boston-based company has deployed its wireless technology in areas covering a total of 5.3 million households, up 28 percent from the end of 2020.

The network is now available in parts of five cities, including Boston, with another coming soon – Columbus, Ohio. The target audience for now is people living in multi-unit condominiums, although the Columbus service will be the company’s first available for individual homes.

Unlike a cable or telephone company that provides Internet services, Starry does not have to run cables to customers’ homes and apartments. Instead, it places its radio equipment on rooftops and mobile towers and gives each customer a compatible wireless router.

That will allow it to expand at a fraction of the cost of wired services and offer cheaper rates to people living in places where there isn’t normally much competition for broadband, according to analyst Walt Piecyk of LightShed Partners, who presented the presentation. from Tuesday.

“The technology delivers better speed at a lower price to a customer base that hasn’t had many options until now,” Piecyk said.

Starry claimed on Tuesday that his network cost 1 percent of the cost of a fiber optic cable network for comparable coverage.

The company’s expansion last year came amid shortages of electronic components that have hampered others in the Internet services market. Starry assembles its own wireless equipment, giving it more flexibility to swap components when a shortage occurs. Yet it has just like any other company had to deal with the pandemic and the staff shortage.

“You have challenges across the board, whether it’s labor, whether it’s supply chains, whether it’s COVID on or COVID out,” CEO Chet Kanojia said in an interview. “It’s been a great journey.”

Starry’s equipment will be assembled at a shop in Roxbury, and the company is also expanding production in Lowell at a former Wang facility that will eventually employ 100 or more workers, Kanojia said.

Starry announced his plan to merge with a SPAC and go public in October, while the SPAC market was still booming. But stock the prices of many companies that have gone public through SPACs have recently crashed, raising the question of how much money will be raised by companies with deals pending. Boston biotech Gelesis completed its SPAC merger last week, raising less than a third of the amount it initially targeted in July.

Kanojia blames the problems in the SPAC market on immature companies that went public too early, arguing that Starry is different.

“There are companies that – let’s call it a shovel a shovel – are just low quality or have made things up, or have been through the wringer four times and are in debt to the gills, or concept companies that have no idea what it’s all about. business,” he said. “We’re really with real growth and real foundations.”

Starry and its SPAC partner FirstMark Horizon Acquisition Corp. have also taken steps to reassure investors that their interests are aligned. Sponsors of the FirstMark SPAC would typically receive 20 percent of the new company’s stock, regardless of how the deal went. But they have agreed to set aside three-quarters of their shares until Starry’s shares reach higher prices.

Starry’s service starts at $50 for speeds of 200 megabits per second, fast enough to watch streaming video in 4K or download a high-definition movie file in minutes.

Starry also participates in government grant programs to provide Internet services to low-income households and has a free offering in some public housing complexes in Boston. That segment reached nearly 56,000 households at the end of 2021, an increase of 88 percent from a year earlier.

Aaron Pressman can be reached at aaron.pressman@globe.com. Follow him on Twitter @ampressman.

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