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MetroFi – Profile

August 16, 2004

HQ: Mountain View, CA
Founded: 2002
Investors: $9M Series A round in April 2004 with August Capital, Sevin Rosen Funds, Western Technology.
Management: Most of team came from Covad, including CEO Chuck Haas who was a Covad founder.
Competitors: Syndeo Group, US Wireless Online.
Business Model: MetroFi has a remarkeably simple business model that is similar to the rise of the community ISPs in the early 1980s. They are selling high-speed Net access via Community-wide WiFi for a lower price than via the telcos/cable companies – as low as $20 a month. Consumers get cheaper access and can rome the area, however, they may suffer from signal degradation behind walls. MetroFi can offer lower service rates because they currently pay only $100K a square mile to deploy, which would put its test case in Santa Clara, CA at $2M. That’s one-tenth the cost of building a new DSL or cable network.
Dirt: This is a timing and marketing play – previous tries from Spring and Ricochet were big failures, however, the technology may not have been mature enough. If MetroFi can get good conversion numbers, expect the company to have a huge series B – $100M or more to quickly rollout in other communities. It remains unclear how MetroFi will get the word out – traditional competitors like SBC and Comcast have considerable marketing reach to contend with. MetroFi may partner with ISPs like Earthlink but no details have been ironed out. Roll-out is currently behind schedule and customer support is lackluster. With Covad DNA in the management team these guys clearly know how to get big fast. That said, hopefully they learned the right lessons from Covad’s many growing pains and eventual bankruptcy.


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