Imagine starting a company in an industry to compete with the likes of Amazon, Ford or Coca-Cola? That’s exactly what the minds behind IQ Fiber did when they founded an internet service provider to compete, at least on the local level, with AT&T and Comcast. CEO Ted Schremp and CMO Kim Smithers, both life-long veterans of the telecommunications industry, began the company during the pandemic while reflecting on poor internet service and a lack of options.
Now, funded with an additional injection of capital from its founding investor, the Jacksonville-based ISP is expanding at gigabyte speeds, including expanding outside its home base for the first time.
“We went from being an idea to being a sort of new business venture called a startup and you know, the first year of our life was very much a classic startup ... find an office, hire people, get a bank account etc,” Schremp recently told the Business Journal. “And then of course, once you start building network and are deploying significant capital, and that sort of makes you start to feel like a real business. But after we turned on our first neighborhood in San Marco, we’ve very much moved into the scale up stage of business.”
FUNDING
Beginning during the pandemic, the local ISP was funded by SDC Capital Partners, a global digital infrastructure investment firm specializing in data centers, fiber networks, wireless infrastructure and associated businesses, who provided an undisclosed amount to fund the Jacksonville-based startup in 2021. IQ Fiber’s network is capable of symmetrical speeds of up to 10 gigabits per second. The network consists of underground conduit and fiber-optic cables extending from the core internet backbone directly into individual homes, allowing for the fastest internet speeds available while supporting the explosive growth in internet usage and demand. The company’s business model is akin to Netflix’s, a month-to-month subscription with no long-term commitments.
With funding secured, IQ Fiber began to grow. Within two years, the company has grown from two employees to more than 75 and is actively working in five counties. Service is now available in San Marco, Mandarin, Jacksonville Beach, Atlantic Beach, Orange Park and Neptune Beach.
Ahead of its Gainesville announcement, the company said it is already on track to deliver its Phase 1 target of 60,000 serviceable homes across metro Jacksonville and four counties in Northeast Florida.
“This additional equity commitment is a reflection of IQ Fiber’s success and our confidence in the significant growth potential ahead,” said Clinton Karcher, partner at SDC Capital Partners.
The latest round of funding from SDC — $150 million — allowed IQ Fiber to accelerate expansion efforts, including expanding into Alachua County.
“We are excited to continue our partnership with SDC to offer a new choice to residents across Northeast Florida,” Schremp said. “While this area has experienced significant growth over the last few years, residents continue to be underserved by incumbent providers.”
“If you rewind two weeks ago we were deploying across all four counties of Northeast Florida, and then of course now having announced Gainesville, which will be kind of a second market that’s going to be running in parallel to Jacksonville... it all feels great. It’s kind of like you know, a dream come true quite literally,” Schremp said. “And and then along the way, obviously, to have such significant endorsement in the form of capital from our investors is not just fuel for the for continued deployment, and of course, the even bigger deployment with Gainesville, but it’s it’s a vote of confidence in the business and the team that we’ve built.”
EXPANSION
IQ Fiber’s initial investment in Gainesville is estimated at nearly $40 million. IQ Fiber will be the first locally based residential fiber-optic company to enter the Gainesville market.
“It has always been a policy priority of mine to extend broadband competition in our community,” Gainesville Mayor Harvey Ward Jr. said. “I’m pleased to see IQ Fiber expanding into the Gainesville market, and I hope their presence here will create a variety of opportunities for all our neighbors.”
The company will establish a satellite office in Gainesville and hire more than 30 employees to support the expansion.
“Gainesville, on a smaller scale is much like Jacksonville in terms of the people that live there, how they work and the homes the age and the setup of the homes,” Smithers said. “As a as an expanded market, it made sense. They are also underserved with fiber, which is extremely attractive to us.”
Due to the cost prohibitive nature of installing underground fiber optic cables, IQ Fiber’s business model focuses on areas without existing fiber options to provide the largest potential customer pool for funds allocated.
Construction on the Gainesville and Alachua County network will begin this summer.
WHAT’S NEXT
IQ Fiber said it considers three factors ahead of launching a new network: demographics, density and fiber availability.
Broadband has become a crucial utility, with 90% of US households already having access to it, but higher speeds, like those provided by fiber-optics, are elusive for many.
Density is important because, Schremp said to build underground fiber networks, which can be costly. IQ Fiber said it focuses on finding locations with a viable business case, meaning a reasonable level of density, as farmland is not ideal for fiber.
Many places are underserved by DSL or cable providers like AT&T or Comcast, and Schremp said he believes in providing choice and superior technology, such as fiber. While fiber is important, he also said he prioritizes delivering an excellent overall customer experience.
“We stated and still state that our phase one deployment goal of 60,000 homes in the Jacksonville metro area is on track and is on time etc,” Schremp said. “Of course we’ve never disclosed what exactly that timeline is for competitive reasons. But we see significantly more opportunity in Northeast Florida than our initial 60,000 goal. So you could expect us to be constructing network, for the next three, four or five years for sure.”
Timeline
August 2021 - IQ Fiber is founded with an undisclosed equity investment from SDC Capital Partners.
December 2021 - IQ Fiber selects its Jacksonville headquarters at 8787 Perimeter Park Blvd.
February 2022 - IQ Fiber announces national partnerships with Calix Inc. and CHR Solutions for broadband technology and customer support capabilities.
March 2022 - Atlantic Beach is announced as the first neighborhood for network deployment. The project was estimated at more than $10 million. Later that month, a more than $8 million project was announced in San Marco.
August 2022 - IQ Fiber activated its first network of users, turning on its 10-gig capable network for customers in the San Jose Forest area of San Marco, nearly a year after its founding.
September 2022 - IQ Fiber announced it is expanding coverage to Jacksonville Beach, Beauclerc, and Mandarin along with its first projects in Clay County with the addition of Orange Park and Fleming Island.
January 2023 - IQ Fiber completes its more than $18 million project in Clay County neighborhoods and begins activating customers. The company also announced a $36 million expansion into Nassau and St. Johns counties.
May 2023 - IQ Fiber announces the completion of a $150 million equity investment round with founding partners, SDC Capital Partners. The company also announced its first expansion outside of the First Coast.
