Alphabet, the parent company of Google, has revealed plans to seek external investment for its GFiber internet business, which provides Wi-Fi and internet connectivity in various parts of the United States. The move comes as Alphabet aims to accelerate the expansion of GFiber to more cities and compete with major internet service providers such as Comcast, Verizon Communications, and AT&T.
GFiber, which has grown its customer base threefold in the past six years, initially launched in Kansas in 2012 and has since expanded to 15 states. Despite recent deals that would extend its services to over 25 additional cities, GFiber faces challenges in providing internet access to large portions of the U.S., including six of the 10 most populous cities like New York.
Alphabet’s president and chief investment officer, Ruth Porat, stated that seeking external capital will enable GFiber to scale its technical leadership, expand its reach, and improve internet access for more communities. The company has already hired an investment bank to facilitate the process of selling equity, with the ultimate goal of making GFiber independent from Alphabet.
In a statement, GFiber CEO Dinni Jain expressed readiness to scale the business much faster. GFiber is part of Alphabet’s Other Bets, a collection of businesses at earlier stages of research or commercialization, which also includes health company Verily and self-driving car business Waymo. In 2023, the Other Bets collectively incurred a $4.1 billion loss on $1.5 billion in revenue.
Alphabet, as part of its overall strategy to revamp its cost base, aims to sharpen its investment focus while capturing the upside of technology breakthroughs across its portfolio of Other Bets. The company has recently announced job cuts, though it declined to comment on whether GFiber’s fundraising effort is related to its broader cost-efficiency program.
