Why Starry chose to go public via SPAC

Starry, a Boston-based wireless internet service provider, listed on the New York Stock Exchange last week via a SPAC merger.

Why it matters: Starry going public represents a comeback for CEO Chaitanya "Chet" Kanojia, whose last startup captured tons of attention but was crushed by a Supreme Court ruling.

Context: After raising more than $150 million in Series E funding in March 2021, Starry's executives immediately decided to pursue a SPAC, Kanojia tells Axios.

• "In the midst of all of this pandemic mayhem ... people were having us come into their homes to swap their service and put Starry in, which was like, sh--, if we can make it through all this, this is a great business," Kanojia says.
• Starry chose to merge with FirstMark Horizon Acquisition, a blank check company formed by FirstMark Capital, a long-time shareholder in the startup that also backed Kanojia's previous company, Aereo.
• "Incredibly high level of integrity and trust between all parties," Kanojia says. "If you're a venture capital firm, it's in your DNA that a return is 10 years out. They're playing for the long game."
• Starry had raised $450 million in equity and convertible debt prior to the SPAC deal. The FirstMark merger valued Starry at $1.76 billion with gross proceeds of $176 million.
• "Telecommunications, in particular, is more capital intensive than the regular average bear software company," Kanojia says. "It gets to a stage where the public markets are the right place for you."

Flashback: Prior to Starry, Kanojia was CEO of streaming TV startup Aereo, which shut down in 2014 after the Supreme Court ruled it was violating copyright laws.

• Kanojia founded Starry shortly thereafter. When we spoke in 2017, Kanojia told me building Aereo laid bare to him the sheer lack of affordable and quality internet options in the U.S.

By the numbers: Starry's service is now available in Boston, Denver, Los Angeles, New York City, Washington, D.C., and Columbus.

• Its subscriber base reached 34,495 in 2020 and grew to 63,230 by the end of 2021, according to its fourth quarter 2021 release.
• In its January investor presentation, Starry estimated similar scaling with 115,000 in 2022 and 228,000 in 2023.
• Starry's average penetration rates among multi-dwelling units is 25% after one year, 28% after two years and 32% after three years, Kanojia noted.

What's next: The company is working on its next generation of products and is focused on scaling Starry Connect, its low-cost service in public and affordable housing.

The bottom line: "I wouldn't have taken any other company public if I didn't have that view to say if we just keep doing what we're doing for the next 10 years or five years or draw your horizon timeline, and the results are known or close to be known, and anything that is unknown could be a potential giant upsize. That's the way," Kanojia says.