Written by Jeffrey Dustin
SAN FRANCISCO (Reuters) – Alphabet plans to seek outside investment in GFiber, a business that sells Wi-Fi and internet connections in parts of the United States, as it expands into more cities. the company told Reuters on Monday.
GFiber, owned by Google's parent company, competes with major internet service providers such as Comcast, Verizon Communications, and AT&T.
Since vowing 14 years ago to increase internet speeds 100x through fiber optic cables, GFiber has expanded to 15 states, starting in Kansas in 2012.
Over the past six years, its customer base has tripled, GFiber told Reuters, without disclosing the total number of users. The company has signed agreements to provide services in more than 25 additional cities in 2023.
Still, the company faces competition from larger incumbents and doesn't yet offer internet across much of the United States, including six of the 10 most populous cities, including New York.
Ruth Porat, Alphabet's president and chief investment officer, told Reuters: “This next step in raising external capital will allow them (GFiber) to expand their technology leadership, expand their reach and bring more We will be able to provide better internet access to our community,” he told Reuters in a statement.
Alphabet declined to comment on how much money GFiber was looking to raise or the valuation it was seeking.
G-Fiber has already hired an investment bank and begun the process of selling its stake, according to people close to Alphabet's efforts. The person, speaking on condition of anonymity, said the future goal is for GFiber to become independent from Alphabet.
“We're ready to scale this even faster,” GFiber CEO Dinni Jain said in a statement.
Other bets
GFiber is one of Alphabet's so-called Other Bets, a collection of companies other than Google that are in the early stages of research or commercialization. These include health company Verily and self-driving car company Waymo, both of which have raised funding from outside investors.
In 2023, Other Bets lost a total of $4.1 billion out of $1.5 billion in revenue generated primarily by internet and healthcare-related services, according to Alphabet's annual report.
Porat, who also serves as chief financial officer, told analysts last week that Alphabet aims to “narrow our investment focus while capturing upside from attractive technology breakthroughs across our portfolio” at Other Bets. He said he is doing so.
One such company, Alphabet's Moonshot division known as X, was also looking for outside capital to spin out more projects, she said at the time. Porat said Alphabet is working to rethink its cost base across the board.
The company, like other companies in the technology industry, recently announced layoffs. He declined to comment on whether GFiber's fundraising efforts are related to Alphabet's overall cost efficiency program.
(Reporting by Jeffrey Dustin in San Francisco; Editing by Jamie Freed)
