Florida startup IQ Fiber shifts into execution mode with another $150M in hand

Florida ISP IQ Fiber has turned a corner. After spending the past 18 months operating in start-up mode and building its network deployment, sales and marketing machines, the company is now entering what CEO Ted Schremp called its production phase. And the operator is flush with a fresh $150 million infusion of cash from investment company SDC Capital Partners to fuel its expansion in the Jacksonville area.

While he declined to disclose exact figures, Schremp said IQ Fiber’s customer and penetration figures are running ahead of plan. He added it is “hitting its stride” and aiming to “grow customers by 4x” by the end of 2023.

“The name of the game is to deploy as aggressively as we possibly can,” he said.

In terms of what it plans to do with the new funding, Schremp said it will go toward not just network construction and securing customer CPE but also beefing up its sales and marketing capabilities.

The operator is still a relative newcomer in the broadband space, having been founded with backing from SDC in August 2021. SDC’s other investments in telecom include residential fiber players Allo Fiber in the Midwest and Cityside Networks in California, as well as dark and enteprise fiber providers Bandwidth IG, Fatbeam and Aummit IG. It also has a stake in well-known telecom engineering and construction specialist Tilson.

In April 2022, IQ Fiber’s CTO told Fierce it was initially aiming to deploy fiber to 60,000 passings by the end of 2023 and Schremp said that timeline is still accurate. The operator activated the first portion of its network in August 2022.

Already, Schremp said IQ Fiber has achieved a net promoter score of 85 – well above the likes of area cable incumbent Comcast. But he noted that’s not just because it is the first fiber provider in the markets it serves, competing with Comcast and AT&T’s DSL. It’s largely due to IQ’s focus on providing not just choice but also a radically different customer experience from what locals are used to. This includes local call center teams who answer the phone within 15 seconds and the installation of whole home Wi-Fi as part of its service offering.

While IQ Fiber hasn’t seen any fiber overbuilders in its territory yet, Schremp said it does expect some to pop up over the coming years, especially from ILEC AT&T. But that doesn’t mean the telecom giant will automatically win.

“AT&T can deploy fiber all they want but they’re still AT&T and there’s not a lot of love lost” from a consumer standpoint, he said.

Next steps

IQ’s builds currently span four counties in northern Florida around Jacksonville, covering markets like San Marco, Mandarin, Jacksonville Beach, Atlantic Beach, Orange Park Fernandina Beach, Nocatee, Anastasia Island, Fleming Island and Neptune Beach.

While IQ Fiber didn’t disclose SDC’s initial investment, it has publicly announced projects totaling at least $93.5 million. These include its work in Jacksonville Beach, Beauclerc, Mandarin, Town of Orange Park and Fleming Island ($45 million); Atlantic Beach ($12.5 million); and Anastasia Island and Fernandina Beach ($36 million).

Schremp hinted additional market announcements are on the way, but declined to say how many are in the works.

In terms of where it’s looking next, Schremp said it’s considering geographies that make sense. So, he said, you won’t catch it in North Dakota or rural areas, for example, but perhaps in other urban and suburban markets where it could replicate its business model.

Asked how IQ views the M&A landscape, Schremp said it’s no secret there’s likely to be rationalization across the market sometime in the coming years. He said the operator could be a buyer if the opportunity is right to reach an area compared to an organic build.

But he added that’s not the only potential future for IQ. “I wouldn’t mind ringing the bell at New York Stock Exchange five years from now if that’s the appropriate exit,” he concluded.