Challenger broadband provider Cuckoo raises £4.3M to free users from expensive internet services
Access to the internet is more of a necessity nowadays, with the UN recognising it as a basic human right. However, broadband complaints are reportedly almost 40% higher in the UK, over every other sector. A key reason is that broadband firms offer new customers discounted prices, which can rise by up to 89% when their contract period ends. Daily, about 25,000 more people are said to roll onto this charge, often without them realising.
London-based national broadband provider Cuckoo aims to change the prevalent condition. It ensures that more people have access to better internet, and it wants to simplify broadband for users by offering a great deal on a rolling contract basis, sans hidden fees. The company has now raised £4.3 million in its latest funding round.
The fresh funding round for Cuckoo was led by RTP Global, along with participation from JamJar Investments. Some individual investors also participated in the round including marketing veterans from Monzo, an early Stripe employee and Verizon’s former EMEA director. This funding round also marks the launch of the company’s service on uSwitch.
In a conversation with UKTN, the company’s founder and CEO, Alexander Fitzgerald notes that the seed found for the company will be used to expand their current team of 11 people. Their team could be doubled by the end of 2021. Additionally, the startup will further expand its services to onboard more customers.
Better internet access for everyone
Cuckoo presents itself as a company that offers a fresh new perspective on the good ol’ broadband segment. “We are the consumer software layer of broadband supply. We don’t own the wires or route the network traffic. We acquire, bill and service customers more efficiently through building the latest technology and having no legacy systems,” says Fitzgerald.
He adds that their approach enables the company to pass on the “true” cost of broadband to customers while keeping the company sustainable. “We do this by aligning our business model with customers, who can leave anytime, without paying an exit fee,” Fitzgerald adds. The company offers a single 67 Megabits per second fibre deal on a monthly rolling contract with no hidden fees.
The company’s approach seems to be working as well, as it posted a 250% growth so far in 2021. Fitzgerald says, “We’re growing quickly through word of mouth and referrals. People have grown sick of their broadband company during lockdown! We’ve even had one customer receive almost £400 in cash so far this year from referring their friends to Cuckoo.”
The Cuckoo Compass
Alongside being a company that’s keen on delivering a fair broadband experience, Cuckoo goes a bit beyond. It takes 1% of each bill and uses it to help get the internet to places it’s needed most, like conflict zones, natural disaster sites and developing communities. Their customers get to choose the project that they’d like to support.
“Customers choose whether they support medical centres or schools. We‘ve partnered with the amazing team at Jangala, a UK-based charity who have pioneered two ingenious products, the Big Box and the Get Box, designed to help get reliable internet connections into conflict zones, disaster sites and developing communities. Like us, they believe that decent internet access should be a human right,” Fitzgerald remarks.
The competition and the future
In the UK, BT, Sky, TalkTalk, and Virgin own 90% of the market. Cuckoo aims to be a disruptor in this segment. The company is also completely built on the cloud, which may be the first-ever case as it doesn’t run on expensive servers and are able to iterate their tech stack continuously.
Cuckoo isn’t too worried about Elon Musk’s Starlink satellite service and others. “Starlink is great as they’ll be useful for hard to reach areas that can’t get wired broadband. However, wires will still beat satellites for the vast majority of homes (over 95% in the UK). You can get much faster speeds and much lower latency through a wired service,” Fitzgerald concludes.
Currently, Cuckoo is available for 90% of homes across the UK.