$30,000/subscriber as Starry goes public


Starry is a Boston ISP that is claiming a going public value of $1.5 billion on 48,000 subscribers. That’s about 1% of the homes passed. They’ve spent over $200 million.

Its implicit business proposition is that about 1 in 5 cable homes will switch to wireless in the next five years and that a substantial share will choose Starry over T-Mobile, Verizon, and others.

I originally wrote “That’s about as likely as MySpace reclaiming the #1 position in web music.”

Then I discovered it is getting $400 million cash as part of the deal. That will allow the company to fund years of losses. It’s still a longshot, but wireless is relatively cheap to build. If it can keep costs all the way down, it might make it if the other wireless companies are able to maintain cartel-like pricing.

Charismatic CEO Chet Kanojia has raised hundreds of millions from Barry Diller and others. He leads a competent engineering team who have designed a powerful home gateway. They developed a neat trick, using a Wi-Fi chip (?Quantenna) to run the backhaul and upsampling to the higher frequencies they are using.

Virginia Lam Abrams has done a remarkable job positioning the company, getting major press coverage that is essential in keeping down marketing cost. They claim a $430 cost to connect each customer and $280-4375 for subscriber acquisition.

Starry’s key advantage is the Firstmark deal comes with $430 million. That’s enough to keep it going for years. Most of the money was raised through a “blank check” SPAC, a business deal some question. In this case, however, the cash is in the bank.

Contrary to the company’s earlier claims, they do not deliver wireless Internet to the apartments they service. Rather, the business to date has been wireless to the rooftop and then wires throughout the building. A similar design, fiber to the basement, connected tens of millions in Japan and Korea. The technology works, especially now that gigabit and even 5 gigabit wireless backhaul is cheap.

Five years ago, Google spent millions on Webpass with a similar technology model but couldn’t make the business work. Literally dozens of others have delivered business services this way. Many have tried to extend to consumers as well.

Customer acquisition costs are likely to remain high, as they are for all broadband providers in saturated markets. It’s very hard to get people to switch from something that works. The right competitive price for a fairly robust wireless service should be around $25-30/month. But it’s not clear whether the entry of T-Mobile, Verizon, etc will drive competitive pricing.

The difference between what Starry said it was doing and what it really did

When Starry launched in 2016, it promised a

fixed wireless broadband network capable of delivering internet speeds of up
to one gigabit, wirelessly to the home. Using a self-installation system, consumers will be able to buy
Starry products directly and connect to the internet in minutes,

emphasis added

Starry soon discovered it didn’t work. Getting a high frequency signal through walls and windows, as Verizon discovered, is often difficult — especially for apartments on the wrong side of the building.

So it scrapped the original plan. Instead, they use wireless to a point on the rooftop and the connection to each apartment is wired. I discovered that from one of their diagrams, but they persisted in denying it. Several reporters were misled.

Three years later, Starry continued to claim

Using our innovative, next generation fixed wireless technology, Starry is deploying gigabit-capable broadband to the home

Its presentation on the deal had at least three figures that were misleading at best.

Starry, Inc. to Go Public in Business Combination with
FirstMark Horizon Acquisition Corp. to Bring its Transformative
Broadband Service to Millions of Households

● Starry, Inc. (“Starry”) delivers customers a high speed, fixed wireless broadband
experience at a fraction of the cost of fiber through its unique, end-to-end
technology stack
● Today, Starry’s network covers more than 4.7 million U.S. households across six
● Starry is poised for rapid expansion and aims to cover 25 million households
by 2026 with a projected 1.4 million residential and small business subscribers
● This $1.66 billion pro forma enterprise value transaction includes significant
sponsor and shareholder alignment, with 75% of sponsor-held shares subject
to either a performance-based earn-out or forfeiture
● The PIPE is anchored by leading institutional investors, strategic investors, and
existing Starry investors including ArrowMark Partners, Atreides
Management, Fidelity Management & Research Company LLC, and Tiger
Global Management
● Investor presentation and management remarks to be posted at 7:30 AM ET
on October 7, 2021 on the Starry investor page
NEW YORK and BOSTON, October 7, 2021 – Starry, a next generation licensed
fixed wireless technology developer and internet service provider, and FirstMark
Horizon Acquisition Corp. (NYSE: FMAC) (“FirstMark”), a special purpose acquisition
company sponsored by an affiliate of FirstMark Capital, today announced that they
have entered into a definitive merger agreement. Upon completion of the mergers
contemplated therein, the combined company will continue to operate as Starry
and will be listed on a national exchange under the ticker symbol “STRY.”
The transaction implies a pro forma enterprise value of $1.66 billion and will
give Starry $452 million in cash on the balance sheet (assuming no redemptions of
the common stock held by FirstMark’s stockholders), including $130 million from a
fully committed PIPE and contemporaneous equity round in Starry that includes
ArrowMark Partners, Atreides Management, Fidelity Management & Research
Company LLC, Tiger Global Management, and affiliates of FirstMark Capital, to fund
its growth and the deployment of its services across the United States, and to retire
Starry’s existing debt. The transaction is also supported by important execution
partners, including Quanta Services, that will help Starry continue its significant
Additionally, the transaction includes significant sponsor alignment: FirstMark
Capital, an affiliate of FirstMark’s sponsor, is an existing long-term investor in Starry
and will retain its board seat, and 75% of the sponsor-held shares are subject to a
performance-based earn-out and forfeiture of one million shares.
Uniquely, the holders of FirstMark Class A common stock that do not elect to
redeem their shares in connection with the transaction will share in a pool of one
million additional shares based on an exchange ratio between 1.0242 and 1.2415, to
be determined based on the number of unredeemed shares. Assuming a price of
$10.00 per share of FirstMark Class A common stock at the closing of the transaction,
each share of FirstMark Class A common stock would receive shares of the postcombination company with a value ranging between $10.24 (assuming no
redemptions by FirstMark’s stockholders) and $12.42 (assuming redemptions
resulting in the maximum exchange ratio).
“When we set out to build this business, we wanted to transform how
broadband networks were built so that we could meaningfully improve people’s
lives with faster, better, more affordable internet access,” said Chet Kanojia, coFounder and CEO of Starry. “Nearly seven years later, Starry’s wireless technology
has transformed the economics of connecting homes and small businesses to a
fiber-quality connection through the air – without having to sacrifice reliability or the
customer experience. This business combination with FirstMark will give us the
necessary capital to expand our business and reach profitability. More importantly, it
will allow us to continue to deliver for customers and execute on our mission. We
believe broadband connectivity is a social good and, if it is universally available and
affordable, that great things will happen for families, for communities and for society
as a whole. I cannot think of partners better suited to support our growth than
FirstMark and FirstMark Capital and we’re excited to continue our relationship with
them to bring #HappyInterneting to more places and people.”
Upon closing, Starry will continue to be led by Kanojia as CEO, along with his
experienced management team.
“We believe a key driver of long-term value creation is having truly
exceptional, mission-driven founders who have the discipline, passion and vision to
change the world,” said Amish Jani, Chairman and President of FirstMark. “Chet
and the Starry team have built a company grounded in deep R&D, capable of
disrupting the status quo in an enormous broadband market that is largely
untouched by competition. We have known Chet and the Starry team over multiple
companies and have the utmost confidence in their ability to execute and perform
because we’ve seen them do it before. Starry is not a ‘grand idea.’ It is a proven and
operational technology that is already transforming how networks are built and
significantly changing the customer experience into something that delights, not
frustrates. We could not be more thrilled to bring Starry to the public markets
through this transaction that we believe is aligned for the long-term performance
and long-term success of the company.”
Starry Overview
Founded in 2014, Starry believes broadband is essential and is committed to
delivering on its mission – offering customers a superior internet service that is fast,
reliable, uncapped and competitively-priced, while also working to improve digital
access and equity.
Starry’s wireless network is designed exclusively to serve the needs of fixed
broadband users, including residential and small- and medium-sized businesses,
with broadband that meets the growing bandwidth needs of today’s consumer.
Starry is a research and development company at its core, having invested nearly
$200 million to develop and commercialize proprietary technology that enables it to
wirelessly beam gigabit-speed internet from towers and rooftops to people’s homes
at a fraction of the cost of traditional fiber. The company has a full intellectual
property stack and developed each piece of its network hardware, from the base
stations to the home receiver on customer premises, all the way down to the Wi-Fi
router that serves the customer’s home. The company has also built its own software
billing, customer care, and network management systems to provide complete
visibility and flexibility in serving the customer.
The company has transformed the economics of broadband, pioneering the
use of licensed high frequency spectrum at a low cost to deliver high-capacity, lowlatency, symmetrical connectivity over distances up to one mile. To date, Starry has
successfully deployed its gigabit network in six U.S. cities including Boston, New
York, Los Angeles, Washington D.C., Denver, and Columbus – covering more than 4.7
million households. With its licensed spectrum rights, Starry intends to further
develop its offerings and expand its network to cover more than 25 million
households by 2026, with a projected 1.4 million subscribers and $1.1 billion in
revenue. The company saw 187% year over year revenue growth from 2019 to 2020
and expects revenues of $22 million in 2021. The company expects a revenue CAGR
of 124% for the period between 2020 and 2023.
Starry’s customer-first philosophy is core to how the company operates, from
its proprietary hardware approach all the way to the subscriber experience. Starry’s
technology and service is engineered to delight customers in an industry that has to
date been universally disappointing, with incumbents generating an industry
average net promoter score of 0 as of 2021, compared to Starry’s 2021 net promoter
score of 72.
Starry is also deeply committed to its mission to expand access to highquality, affordable broadband service including to communities such as public and
affordable housing, which have been traditionally underserved and underconnected by incumbent broadband providers. In late 2018, Starry established its
digital equity program, Starry Connect, to bring ultra-low-cost broadband service to
public and affordable housing residents without requiring credit checks, long-term
contracts, individual eligibility requirements or a lengthy application process.
Summary of the Transaction
The transaction is expected to be funded through a combination of
FirstMark’s $414 million of cash in trust (assuming no redemptions of common stock
held by FirstMark’s stockholders) supported by a $130 million fully committed PIPE
and contemporaneous equity investment at $10.00 per share.
The transaction implies a pro forma Starry enterprise value of $1.66 billion, or
approximately 7x 2025 estimated adjusted EBITDA. It is estimated that posttransaction, Starry will have approximately $452 million on its balance sheet
(assuming no redemptions of common stock held by FirstMark’s stockholders) to
fund growth initiatives. Starry will use a portion of cash raised in the PIPE, as well as a
$150 million issuance of new convertible debt, to retire Starry’s existing debt. The
new convertible debt is led by AS Birch Grove, an existing lender to Starry, and
certain funds managed by Highbridge Capital Management, LLC.
The transaction, which has been unanimously approved by the boards of
directors of Starry and FirstMark, is expected to close in Q1 2022, subject to receipt of
FirstMark stockholder approval and the satisfaction of other customary closing
At the close of the transaction and once public, Starry will have a sevenperson board, with three independent directors. Amish Jani (FirstMark and FirstMark
Capital), Starry CEO Chet Kanojia, and independent director James Chiddix will
remain on the board.
Investor Presentation
A copy of the investor presentation can be found by accessing the Starry investor
Goldman Sachs & Co. LLC served as financial advisor to Starry and placement
agent to FirstMark Horizon Acquisition Corp. Credit Suisse served as financial advisor
and capital markets advisor to FirstMark.
Latham & Watkins LLP acted as legal advisor to Starry. Skadden, Arps, Slate,
Meagher & Flom LLP acted as legal advisor to FirstMark.
Additional Information about the Business Combination and Where to Find It
In connection with the proposed business combination, Starry Holdings, Inc.
(“Starry Holdings”), a newly formed subsidiary of Starry, will file a registration
statement on Form S-4 (the “Form S-4”) with the Securities and Exchange
Commission (the “SEC”). The Form S-4 will include a proxy statement of FirstMark
Horizon Acquisition Corp. (“FirstMark”) and a prospectus of Starry Holdings, referred
to as a proxy statement/prospectus. The proxy statement/prospectus will be sent to
all FirstMark stockholders. Additionally, Starry Holdings and FirstMark will file other
relevant materials with the SEC in connection with the proposed business
combination. Copies of the Form S-4, the proxy statement/prospectus and all other
relevant materials filed or that will be filed with the SEC may be obtained free of
charge at the SEC’s website at www.sec.gov. Before making any voting or
investment decision, investors and security holders of FirstMark are urged to read
the Form S-4, the proxy statement/prospectus and all other relevant materials filed
or that will be filed with the SEC in connection with the proposed business
combination because they will contain important information about the proposed
business combination and the parties to the proposed business combination.
Participants in Solicitation
FirstMark, Starry Holdings and Starry and their respective directors and
executive officers, under SEC rules, may be deemed to be participants in the
solicitation of proxies of FirstMark’s stockholders in connection with the proposed
business combination. Investors and security holders may obtain more detailed
information regarding the names and interests in the proposed business
combination of FirstMark’s directors and officers in FirstMark’s filings with the SEC,
including FirstMark’s registration statement on Form S-1, which was originally filed
with the SEC on September 18, 2020. To the extent that holdings of FirstMark’s
securities have changed from the amounts reported in FirstMark’s registration
statement on Form S-1, such changes have been or will be reflected on Statements
of Change in Ownership on Form 4 filed with the SEC. Information regarding the
persons who may, under SEC rules, be deemed participants in the solicitation of
proxies to FirstMark’s stockholders in connection with the business combination will
be included in the proxy statement/prospectus relating to the proposed business
combination when it becomes available. You may obtain free copies of these
documents as described in the preceding paragraph.
No Offer or Solicitation
This communication shall not constitute a proxy statement or solicitation of a
proxy, consent or authorization with respect to any securities or in respect of the
proposed business combination. This communication shall also not constitute an
offer to sell or a solicitation of an offer to buy any securities of FirstMark, Starry
Holdings or Starry, nor shall there be any sale of securities in any state or jurisdiction
in which such offer, solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such state or jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting the requirements
of Section 10 of the Securities Act of 1933, as amended.
Forward-Looking Statements
This communication includes “forward-looking statements” within the
meaning of the “safe harbor” provisions of the Private Securities Litigation Reform
Act of 1995 with respect to the proposed business combination between FirstMark
and Starry. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,”
“anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believe,” “predict,”
“potential,” “continue,” “strategy,” “future,” “opportunity,” “would,” “seem,” “seek,”
“outlook” and similar expressions are intended to identify such forward-looking
statements. Forward-looking statements are predictions, projections and other
statements about future events that are based on current expectations and
assumptions and, as a result, are subject to risks and uncertainties that could cause
the actual results to differ materially from the expected results. These statements are
based on various assumptions, whether or not identified in this communication.
These forward-looking statements are provided for illustrative purposes only and are
not intended to serve as, and must not be relied on by an investor as, a guarantee, an
assurance, a prediction or a definitive statement of fact or probability. Actual events
and circumstances are difficult or impossible to predict and will differ from
assumptions. These forward-looking statements include, without limitation, Starry’s
and FirstMark’s expectations with respect to anticipated financial impacts of the
proposed business combination, the satisfaction of closing conditions to the
proposed business combination, and the timing of the completion of the proposed
business combination. You should carefully consider the risks and uncertainties
described in the “Risk Factors” section of FirstMark’s registration statement on Form
S-1 (File No. 333-248916), its Annual Report on Form 10-K, as amended from time to
time, for the fiscal year ended December 31, 2020, and its subsequent Quarterly
Reports on Form 10-Q. In addition, there will be risks and uncertainties described in
the Form S-4 and other documents filed by FirstMark or Starry Holdings from time
to time with the SEC. These filings would identify and address other important risks
and uncertainties that could cause actual events and results to differ materially from
those contained in the forward-looking statements. Most of these factors are outside
Starry’s, Starry Holdings’ and FirstMark’s control and are difficult to predict. Many
factors could cause actual future events to differ from the forward-looking
statements in this communication, including but not limited to: (1) the outcome of
any legal proceedings that may be instituted against FirstMark, Starry or Starry
Holdings following the announcement of the proposed business combination; (2)
the inability to complete the proposed business combination, including due to the
inability to concurrently close the business combination and related transactions,
including the private placements of common stock and convertible notes or due to
failure to obtain approval of the stockholders of FirstMark; (3) the risk that the
proposed business combination may not be completed by FirstMark’s business
combination deadline and the potential failure to obtain an extension of the
business combination deadline if sought by FirstMark; (4) the failure to satisfy the
conditions to the consummation of the proposed business combination, including
the approval by the stockholders of FirstMark, the satisfaction of the minimum trust
account amount following any redemptions by FirstMark’s public stockholders and
the receipt of certain governmental and regulatory approvals; (5) delays in obtaining,
adverse conditions contained in, or the inability to obtain necessary regulatory
approvals or complete regulatory reviews required to complete the proposed
business combination; (6) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger agreement; (7)
volatility in the price of FirstMark’s, Starry’s or Starry Holdings’ securities; (8) the risk
that the proposed business combination disrupts current plans and operations as a
result of the announcement and consummation of the business combination; (9) the
inability to recognize the anticipated benefits of the proposed business combination,
which may be affected by, among other things, competition, the ability of the
combined company to grow and manage growth profitably, maintain relationships
with customers and suppliers and retain key employees; (10) costs related to the
proposed business combination; (11) changes in the applicable laws or regulations;
(12) the possibility that the combined company may be adversely affected by other
economic, business, and/or competitive factors; (13) the risk of downturns and a
changing regulatory landscape in the highly competitive industry in which Starry
operates; (14) the impact of the global COVID-19 pandemic; (15) Starry’s ability to
obtain or maintain rights to use licensed spectrum in any market in which Starry
operates and potential declines in the value of Starry’s FCC licenses; (16) the potential
inability of Starry to raise additional capital needed to pursue its business objectives
or to achieve efficiencies regarding other costs; (17) the enforceability of Starry’s
intellectual property, including its patents, and the potential infringement on the
intellectual property rights of others, cyber security risks or potential breaches of
data security; and (18) other risks and uncertainties described in FirstMark’s
registration statement on Form S-1 and Annual Report on Form 10-K, as amended
from time to time, for the fiscal year ended December 31, 2020 and its subsequent
Quarterly Reports on Form 10-Q. These risks and uncertainties may be amplified by
the COVID-19 pandemic, which has caused significant economic uncertainty. Starry,
Starry Holdings and FirstMark caution that the foregoing list of factors is not
exclusive or exhaustive and not to place undue reliance upon any forward-looking
statements, including projections, which speak only as of the date made. None of
Starry, Starry Holdings or FirstMark gives any assurance that Starry, Starry Holdings
or FirstMark will achieve its expectations. None of Starry, Starry Holdings or FirstMark
undertakes or accepts any obligation to publicly provide revisions or updates to any
forward-looking statements, whether as a result of new information, future
developments or otherwise, or should circumstances change, except as otherwise
required by securities and other applicable laws.


About Starry
At Starry, we believe the future is built on connectivity and that connecting
people and communities to high-speed, broadband internet should be simple and
affordable. Using our innovative, next generation licensed fixed wireless technology,
Starry is deploying fiber-quality broadband to the home without bundles, data caps,
or long-term contracts. Starry is a different kind of internet service provider. We’re
building a platform for the future by putting our customers first, protecting their
privacy, ensuring access to an open and neutral net, and putting the customer
experience at the heart of everything we do. Headquartered in Boston and backed
by world-class investors, Starry is currently available in Boston, New York, Los
Angeles, Washington, DC, Denver, and Columbus, and is expanding nationwide. To
learn more about Starry or to join our team and help us build a better internet, visit:
About FirstMark
FirstMark is a special purpose acquisition company whose mission is to drive
long-term value creation by actively supporting the next generation of iconic public
companies. FirstMark is comprised of a team of seasoned investors and industry
executives with an extensive track record of identifying transformative trends across
innovative subsectors of technology. Notably, FirstMark’s management team is
composed of the founders and executives of FirstMark Capital, a prominent
technology venture capital firm founded in 2008 with $2.2 billion in total capital
commitments, which has backed entrepreneurs that have created leading
companies, many valued over a billion dollars. For more information, please visit
For Media Inquiries regarding Starry, Inc.
Meredith Ryals
mryals@starry.com / press@starry.com
Lauren Odell / Felipe Ucros
Gladstone Place Partners for Starry
Jennifer Wlach / John Collins / Kimberly Winston
Mercury for Starry
For Media Inquiries regarding FirstMark Horizon Acquisition Corp.
Gregory McNiff
The Blue Shirt Group for FirstMark
For Non-Media Inquiries regarding Starry, Inc.
For Non-Media Inquiries regarding FirstMark Horizon Acquisition Corp.
Eric D. Cheung

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