The Megabuyte Interview: Matthew Hare, CEO and founder of Gigaclear
Matthew Hare doesn’t actually know exactly how many Gigaclear high-speed fibre broadband networks are live this crisp November day, but it’s no wonder: the number changes so quickly. “We put five networks live last week, so it’s going at fair clip!” In the week following our meeting, another two will go live: one in Croughton, and another in Aynho, the self-styled “apricot village at the boundaries of beautiful Oxfordshire and historic Northamptonshire”.
Village life is at the heart of Gigaclear’s mission to bring speedy, future-proof fibre internet to people and businesses in rural areas. The Gigaclear network in Stanton Harcourt, where Hare lives with his family and two flatcoat retrievers, has been serving the 1100 people who live there since last year. While spending most of his time at the company headquarters in Abingdon, the CEO and founder is in London today, where we’ve met in the lively lobby of the Hoxton Hotel in Holborn. Hare is cheery but on point in a dark suit and open-collared pink shirt, as he explains how rural broadband isn’t just a public service: “Oh it does make good money!”
Gigaclear internet actually costs about the same as you pay in a high-density area like London, but, adds Hare: “It’s an infrastructure investment. What we pitch to our investors is that we build our business one building block at a time. Each build can make money from the get-go, because we pre-sell the network to our customers. We go where there’s actual demand for better broadband.” That means Gigaclear tends to pop up where there are businesses, and a high number of information workers who place the highest value on great internet.
Internet to the people
Gigaclear will pre-sell 20-40% of the network before starting the work, meaning there’s usually significant buzz in the run-up to a project. I ask Hare just how typical is the case study on the company website, where one Andrew of Farmoor admits to having been “somewhat aggressive” at Gigaclear’s town meeting. “Oh yes, we have people who get incredibly passionate about what we’re doing.” Mostly this is in favour of the project, adds Hare, but sometimes people don’t like to wait: the construction takes six to nine months, and sometimes there are delays. Like last week in Cambridgeshire, when it rained heavily and the work had to be suspended for the day, causing frustration among customers – they were only five days out! One of them emailed Hare personally, pleading him to sort it out, but rain is beyond the CEO’s purview, alas. “People feel they own the project,” says Hare, who finds the work rewarding: “There’s massive pent-up demand for better internet.”
More than once, Hare comes back to the fact that he thinks BT’s decision to stick to copper internet, as opposed to fibre, is misguided. But he’s not against government broadband subsidies; 95% of Gigaclear’s networks have been built without any subsidies until now, but next year that number will be more like 65%. That means going to areas they wouldn’t otherwise go, and connecting more homes around the periphery. As a former villager myself I appreciate this, I say, but if people choose to live in the woods, can they reasonably expect to get on the network without paying extra? Hare nods; this isn’t his first time hearing this. This is a government policy question though, he says, but put briefly, getting everyone online reduces the cost of governance. “Our customers use the internet on average ten times more than the average UK internet user. They don’t have ten times as many hours in the day! But they’re finding ever more things to use the internet for.” Because the internet becoming a utility, isn’t it? Hare points out that 100 years ago there were debates about whether it was worth the cost to get everyone on the electricity grid – that seems obvious now.
New technology frontiers
Hare (53) grew up in Hampshire and studied economics at Bristol, where in his last year he was recruited by the precursor to Vodafone. “In 1984 though, it was called Racal-Millicom Operating UK Limited. We launched the first mobile service in the UK in 1985, so it was a pretty cool time to be in mobile.” They weren’t really mobile phones, though: “They were car phones. It looked like a big handbag.” Did he have one? “I had one as a sales trainee! Then when I moved into marketing, I had one in the car. But they weren’t really personal devices like what we have now.”
Another experience of early technology came in 1996, when Hare founded the Community Internet Group after seven years with Kinnevik, the Swedish conglomerate. “I wanted to start my own business, and the internet seemed like a neat idea – a really important change.” But to call it a buzz would be pushing it: “It was really, really early days. Modems cost £130. People didn’t know what to do with the internet. They didn’t use email. It was just the beginning of the commercialisation of the internet.” Was it hard work, developing this technology whose promises took their sweet time to deliver? “Building any business is hard,” says Hare, diplomatically. “You need to find something people are willing to pay for, especially in a new market. It’s not obvious where the money’s going to be, but you still need to be convinced, optimistic, dedicated and ruthless.”
You might think establishing Gigaclear in 2010 would be different, as the internet was a certainly a proven technology by then. But maybe not: “Well, how many other people are investing in rural fibre broadband in the UK?” Hare laughs. “Starting anything that other people aren’t doing is always challenging. There was demand for the internet, but what I’d underestimated was how raising money for an infrastructure business is very different than raising money for a software or services business. Fundamentally, you need a different type of investor.” Hare put his own money into Gigaclear first, and the company is now established enough to attract infrastructure investors, who often prefer backing bigger projects.
Funding the new railways
The funding process hasn’t always been smooth, though. In 2012, Gigaclear had to stop digging because the cash had run out, and it took three months to raise the funds to start up again. “The lesson from that experience is that I need to have more money in the back than I ever thought I needed to have! I have to make sure that even a few weeks’ delay in fundraising doesn’t cause any problems.” Gigaclear has a lot of money in the bank right now, says Hare, but this is capital-intensive work: come February next year, the company will be be putting £2 million worth of infrastructure into the ground every single week.
So far, Gigaclear has raised £48.6 million in equity, and more will be needed over the next five years; Hare is noncommittal as to whether this will come from private or public sources. The company started the IPO process earlier this year, but decided to stop due to the change in market sentiment when Russia invaded Ukraine. This affected everyone, says Hare, “but frankly, the net result was that our proposition wasn’t strong enough. And I wasn’t going to go raise money at a low price, so we went back to [private] investors.”
The job of running Gigaclear today, with nearly 100 people onboard, is different to what it was with six people just 18 months ago. “Then, I did everything: answering phones, doing sales calls, negotiating with contractors. … We still have challenges, but they’re different. My job then was doing and managing, while my job now is managing, setting the tone, and making sure we have the right people in the right place doing the right things. … If you’re going to stay the leader as the company grows, you need to change.”
There’s nothing to suggest Hare enjoys this phase any less than the previous ones: “I love the company. I think the idea is great. What we’re doing is a fabulous thing. … There are 1.5 million properties and businesses that fit our market profile today, but as the demand for internet grows, [this number will rise],” says Hare. As the internet increasingly becomes a vital part of daily life, people want a service that doesn’t depend on how far away you live from the switchbox: “People want reliability – that’s what our market research says – it’s not just about speed,” asserts Hare. “Fundamentally, I believe having fibre everywhere will make as much difference to this country as the railways.”