Alphabet has announced plans to seek external investment for GFiber, its subsidiary focused on providing Wi-Fi and internet connectivity in various parts of the United States, Reuters news report said.
GFiber, a subsidiary of Google’s parent company, competes in the market alongside major internet service providers such as Comcast, Verizon Communications, and AT&T.
The Internet Service Provider in its website says it does not charge for installation, activation or equipment. GFiber is offering 1 Gig plan at $70 – at the same price it was in 2012.
Since its inception 14 years ago with a promise to enhance internet speeds through fiber-optic cables, GFiber has expanded its operations to 15 states, starting with its launch in Kansas in 2012. Over the past six years, the company has reported a three-fold increase in the number of Internet customers, although specific user numbers were not disclosed.
Additionally, GFiber has recently secured deals in 2023 that are expected to extend its services to over 25 additional cities.
Despite its growth, GFiber continues to face stiff competition from established players and has yet to provide coverage in significant parts of the U.S., including six of the ten most populous cities such as New York.
Ruth Porat, President and Chief Investment Officer of Alphabet, stated, “This next step of raising external capital will enable them (GFiber) to scale their technical leadership, expand their reach, and provide better internet access to more communities.”
Alphabet declined to reveal the exact amount of funds GFiber intends to raise or its targeted valuation. Sources close to the company revealed that GFiber has already engaged an investment bank to initiate the process of selling equity. The long-term objective is for GFiber to operate independently from Alphabet.
GFiber CEO Dinni Jain expressed readiness to expedite the company’s growth, stating, “We are now ready to scale this much faster.”
GFiber represents one of Alphabet’s “Other Bets,” a collection of businesses beyond Google that are in earlier stages of research or commercialization. These ventures include health company Verily and self-driving car business Waymo, both of which have previously raised funds from external investors.
In 2023, Alphabet’s Other Bets collectively recorded a loss of $4.1 billion on revenue of $1.5 billion, primarily derived from internet and healthcare-related services, according to the company’s annual report.
Ruth Porat emphasized Alphabet’s intention to refine its investment focus while capitalizing on technological advancements across its portfolio of Other Bets. She mentioned that Alphabet’s moonshot division, known as X, is also seeking external capital to support further project development.
Alphabet has recently undergone restructuring efforts to optimize its cost base, a move reflected in the technology sector’s trend of announcing job cuts. However, the company did not comment on whether GFiber’s fundraising initiative is related to Alphabet’s broader cost-efficiency program.
