Eight years after starting Starry to change the way the home internet is delivered, CEO Chaitanya “Chet” Kanojia announced this week that the company completed its special purpose acquisition with FirstMark Horizon Acquisition Corp. and is now trading on the New York Stock Exchange.
The Boston-based internet service provider’s approach involves beaming broadband speed internet through the air using millimeter waves. It touts its internet plan, which runs at about $50 a month, as one that doesn’t involve a long-term contract or hidden fees, a free WiFi router and unlimited data. You can read more about Starry’s origins in a 2016 interview with Kanojia.
This unique technique attracted a lot of investor attention from the likes of FirstMark, Tiger Global Management and KKR, ultimately raising $400 million before going public, Kanojia told TC.
He explained that in going public, Starry was “looking for a long-term partnership that was going to be supportive,” and it found that in FirstMark. Kanojia leads the new entity, and the transaction gives Starry a pro forma enterprise value of $1.76 billion, with gross proceeds of $176 million, according to the company.
“There are few firms you see going into a seed-stage company and nursing it to IPO,” Kanojia added. “We really wanted someone who had seen that movie because the long-term nature of partnerships is critical in public markets. This relationship already spans 20 years for a lot of us.”
If you are asking yourself why Kanojia’s name is familiar, that’s because he had previously founded the Aereo network television streaming service — which FirstMark also invested in — to pull content from free over-the-air signals, essentially with a goal of disrupting the way we watch television. When TV broadcasters didn’t like that, they took Aereo to court, where ultimately Aereo’s business was ruled illegal by the Supreme Court.
Kanojia has since shaken that off, saying that “the court’s history is littered with unfortunate decisions, and we were one of them.” Despite that, Aereo had a product that was well-received by customers and a business model that grew rapidly, he says.
What he took away from the experience was that there was “pent up demand for serving customers in the way they think is fair.” So when he started Starry, he wanted to provide a customer-focused experience that would add value for customers versus competitors that he says are company-focused and instead extract value from customers.
Meanwhile, the closing of the SPAC deals seems to be a happy ending beginning for Kanojia. Today, Starry has both a loyal customer base and one that is also rapidly growing, Kanojia said.
“Going public was a capital event for us, not a liquidity event, so we are not going to screw around with the recipe, but get on a regular capital cycle,” he added. “The company is on a great trajectory for growth and the unit economics are fantastic.”
