WeLink described its financial agreement with Digital Alpha Advisors, which is tied to Cisco, as a 'template for the network operator of tomorrow.'
Startup WeLink announced it received a $185 million investment from Digital Alpha Advisors – an investment firm tied to Cisco – that it plans to use to eventually expand its fixed wireless Internet service into ten US cities.
The company uses the 60GHz and 70GHz spectrum bands coupled with equipment from unnamed manufacturers running the 802.11ay transmission standard to offer uplink and downlink speeds of 940 Mbit/s for $70 per month. Founded in 2018, WeLink currently offers service in Las Vegas and is exploring expansions into Phoenix and Tucson, Arizona, in the second quarter of 2021.
"This is a great investment round for WeLink," WeLink's Kevin Ross and Luke Langford wrote in response to questions from Light Reading. "The funding includes an equity component, in the form of a revenue share facility to fund subscriber growth. WeLink gets access to a pool of capital that funds subscriber growth to make growth capex neutral to the business and shares revenue from those subscribers to offer Digital Alpha a return on that portion of the investment. We receive the capital as we grow to cover network expansion and subscriber acquisition costs."
The executives believe the financing model they're using with Digital Alpha Advisors represents a "template for the network operator of tomorrow" that includes a tempered capital budget, combined revenues and costs and a network capable of supporting multiple revenue streams.
Digital Alpha also has "preferred access" to Cisco's pipeline of commercial opportunities requiring equity financing, which positions the vendor for "new partnership opportunities" with WeLink. "We're thrilled to take this next step with WeLink to enable the future of fixed wireless broadband," John Chapman, CTO of Cisco's broadband business, said in WeLink's release.
Digital Alpha was founded by Rick Shrotri, head of the Global Infrastructure Funds (GIF) team at Cisco, and closed its first fund – Digital Alpha Fund LP – in 2017.
However, WeLink's Ross (the company's CEO) and Langford (the company's president and COO) said the wireless Internet service provider "has a variety of relationships with existing hardware vendors who serve the fixed wireless space." They didn't specifically mention a supplier deal with Cisco.
Both Ross and Langford hail from Vivint Internet, a fixed wireless provider that traced its origins to a security alarm installation company. After several failed expansion efforts, Vivint Internet shut its doors last year.
"Vivint was too early to the market," explained Ross and Langford. "The mmWave [millimeter wave] technology we had access to back in the Vivint days was too expensive and not mature. We were never able to deliver the type of performance and experience (gigabit speeds) we are delivering today at WeLink and, most importantly, at cost points that make business sense."
Things are different today, according to Ross and Langford. They explained that WeLink will use an anchor-and-end-point deployment model that will beam connections from one "anchor" customer to nearby "end-point" customers, thus creating a kind of flexible mesh network that can be expanded. The service will run through receivers on customers' rooftops, which connect to routers inside customers' homes or offices.
Other fixed wireless Internet providers, including C Spire, have deployed a similar design.
WeLink joins a large and growing number of companies using fixed wireless technologies to offer Internet services into homes and offices. T-Mobile, Verizon, LTD Broadband, Starry, Nextlink, Cable One, Mediacom and others are also offering similar services as a way to avoid the expenses involved in routing wired Internet connections to customer locations.
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— Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano
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