Starry, valued at $1.76B, debuts on NYSE

Starry CEO Chet Kanojia is getting another shot at disruption, and this time, there’s no one blocking his path with legal arguments.

Boston-based Starry debuted on the New York Stock Exchange (NYSE) on Tuesday, opening at $8.84 per share and reaching a high of $9.88 before settling down to $9.62. Its debut was the result of a combination with FirstMark Horizon Acquisition Corp., a publicly traded special purpose acquisition company, or SPAC.

A lot of SPAC deals have gone south the past several months, but Starry and FirstMark persevered and closed their deal this week. It’s also worth noting that unlike the go-go days of the early wireless internet, IPOs are few and far between these days. So it’s a bit of a marvel that Starry made its debut at all.

The FirstMark transaction valued Starry at $1.76 billion, with gross proceeds of $176 million, the company said. Starry will continue to be led by co-founder and CEO Kanojia, accompanied by a management team that includes co-founder and CTO Joe Lipowski, whose career included stints at LoJack and Andrew Corporation.

Kanojia’s prior company, Aereo, filed for bankruptcy in 2014 after the U.S. Supreme Court ruled that it was violating copyright laws by capturing broadcast signals and delivering them to subscribers for free. With that company, Kanojia was challenging traditional broadcasters.

Today, with Starry, he’s going after cable companies. In just the past couple of years, wireless carriers like T-Mobile and Verizon more aggressively joined the fray with fixed wireless access (FWA) offerings of their own. 

Starry is disrupting the market by using IEEE 802.11-based technology and 24 GHz and 37 GHz spectrum to reach homes with its flavor of FWA. Starry pitches $50/month plans for "blazing fast" internet speeds.

“This is a complicated sector,” Kanojia told Fierce. Investors need to understand who’s doing what, the propagation, spectrum efficiencies and more. Starry, for example, designed and developed its technology stack entirely in house, combining its proprietary phased array antenna technology with MU-MIMO to deliver high-capacity bandwidth. According to Starry, it delivers superior propagation across the communities it serves.

Starry has been pretty consistent in its messaging, but Kanojia notes that people forget that Sprint tried this in a similar way with the Magic Box. What’s really changed? Not a whole lot when talking about the physics.

‘‘Everything we have shared technologically, performance-wise, has been consistent,” he said. “I think that’s beginning to take hold with investors as well. They’re beginning to say, ‘these guys are beginning to hit meaningful velocity now.’” 

Starry has stated that it's poised for rapid expansion and aims to cover 25 million households by 2026 with a projected 1.4 million residential and small business subscribers.

Despite the pandemic, which limited access to some buildings at various stages of the Covid-19 outbreak, Starry is now deployed in six U.S. cities including Boston, New York, Los Angeles, Washington, D.C., Denver and Columbus, Ohio. It covers more than 5.3 million households.

Starry intends to further develop its offerings and expand its network, but it’s not naming new markets at this time. It currently provides Starry internet service to more than 340,000 units of multi-family housing.

Does Kanojia feel like this is his “second act”? Not really, he said. “I’m very fortunate that I have the opportunity to make things that I like to make, and more importantly, attract people around me who feel the same way and have the same value systems… First act, second act, third act, who knows? It’s creating meaningful things” and making it interesting.

Asked about what kinds of things Starry will be able to do now that it’s public, Kanojia said it’s kind of hard to justify going any faster than Starry is already moving, which is basically doubling business every year. That’s hard to do as a software company, and this one happens to involve software, hardware, infrastructure and customer acquisition, to name a few.

Plus, now it’s got wireless carriers like T-Mobile and Verizon trying to compete in what’s basically the same market.

“I think the market will segment itself out,” based on spectrum choices and business objectives that people are rolling out, such as urban versus rural, he said. There will be cross-over in some suburban parts, but overall, the sentiment seems to be that fixed wireless will create a lot of opportunity and disruption.

In that sense, it’s basically about hitting Starry's stride with the current strategy.

“The machine’s working,” he surmised. “Keep turning the crank. That’s kind of the goal.”