Fledgling fiber provider Honest Networks is looking to spread its reach deeper into the suburbs and across more states using $100 million in fresh funding, expanding beyond a traditional focus on serving multi-dwelling units (MDUs) in New York City.
Founded in 2018, Honest Networks initially launched its symmetrical gigabit service in Manhattan, teaming with corporate real estate partners to target MDUs in the residential, commercial and hospitality markets, company founder and CEO Landon Tucker told Fierce. In 2019 and 2020, the company focused on densifying its footprint in Manhattan and edging out into the broader metro market with rollouts in Brooklyn, Queens and Jersey City.
It initiated its “Phase 3” build earlier this year, pushing further out into what Tucker dubbed “transit-oriented communities” in the tri-state area outside the city. That effort has included towns like New Rochelle and White Plains, N.Y.; Stamford, Conn.; and Hoboken and Secaucus, N.J.
To date, Tucker said the company has passed about 25,000 units and currently has “thousands” of subscribers signed up for its sole $50 per month gigabit broadband offering. He added it is aiming to hit 10,000 customers by 2022. Its primary competitors are Charter’s Spectrum service and Verizon Fios.
Until recently, Honest Networks had only raised around $5.5 million from a series of funding rounds to fuel its work. But last week it announced a new $100 million investment led by private equity group Newlight Partners.
“What this capital does is it really allows us to accelerate that [Phase 3] expansion further,” Tucker said. “So, we will both launch new metros in the tri-state area and we’ll launch new metros in the Mid-Atlantic. We’ll be able to not just target the high-rises and garden style apartments, but we can service different types of properties including walkups, including not just urban areas but suburban areas as well.”
For its urban builds, Honest Networks has been using a combination of leased dark fiber and millimeter wave fixed wireless access technology to serve its customers, with the latter being used for path redundancy and also to extend the reach of the fiber assets. But Tucker noted the new funding will allow it to build up its own fiber infrastructure over time in areas where leasing doesn’t make as much sense.
Echoing comments made by T-Mobile president of Technology Neville Ray, Tucker said “if you can procure great rates for fiber it may make sense to rent versus own. So, in an area like Manhattan where there’s significant amounts of fiber at highly competitive rates it may make sense not to own and lease your fiber.”
He continued “But as we start going into communities which could include these transit-oriented communities or suburban markets where the economics of renting fiber become cost prohibitive that’s where we’ll look to leverage the capital we’ve raised to be able to expand our own fiber footprint.”
In terms of differentiation, Tucker said Honest Networks is focused on delivering holistic connectivity. That includes everything from always-on network, smart home and Wi-Fi everywhere capabilities in MDUs and direct cloud connectivity for remote workers. “Our focus, especially post-Covid, is how do we make the apartment community as connected as possible and as frictionless as possible for the residents who are moving in and for the landlords,” he concluded.