Innocent Drinks founders back broadband start-up taking on BT

Cuckoo
Cuckoo

A broadband start-up attempting to disrupt the dominance of BT has secured $6m (£4.3m) from investors, including the founders of Innocent Drinks.

Cuckoo plans to double its workforce following a fresh funding round supported by JamJar Investments, the fund created by Innocent's Richard Reed, Adam Balon and Jon Wright.

Spearheaded by former Treasury civil servant Alex Fitzgerald, Cuckoo wants to mirror the success of Bulb and Octopus Energy, which have become challengers in the energy market.

The raise was led by RTP Global - an early backer of €33bn takeaway app Delivery Hero - and includes former Monzo executive Tristan Thomas and ex Verizon director Andrew Fleming, who is taking a seat on the board.

Mr Fitzgerald said: "Five years ago the Big Six energy providers had 95pc market share. That is now down to about 55pc. The two main winners from that were Bulb and Octopus Energy.

"Bulb built a brand, which meant it could expand through word-of-mouth and referral-led growth.

"Octopus built a software layer, which meant they could have a much lower cost to serve and an enjoyable experience for customers. That is what we are trying to do in one [with Cuckoo]. "

Cuckoo has already secured £500,000 in funding since launching in February last year. It plans to use the latest capital injection to employ 10 more staff and improve its technology platform to attract more customers.

Richard Reed's JamJar investment fund is one of the backers of Cuckoo
Richard Reed's JamJar investment fund is one of the backers of Cuckoo

The company rents capacity from BT's broadband infrastructure builder Openreach before selling broadband products onto customers. It provides a single package with 67 mbs speed over Openreach's copper lines, the network being phased out by BT in favour of faster full-fibre broadband.

BT is investing £12bn to upgrade the nation to gigabit speeds by 2025, with an aim to connect 20m homes and businesses by the late 2020s. The FTSE 100 firm recently reignited talks with Vodafone and TalkTalk over long-term agreements to use its new fibre network.

Cuckoo plans to mount a challenge to broadband retailers by offering a simpler product choice and flexible contracts.

Gareth Jefferies of RTP Global said consumer broadband was poorly served, despite being one of the largest markets.

He said customers were being left fatigued by "hostile pricing practices, inflexible contracts and deliberately awful customer service".

"Just as we have seen in insurance, energy and banking, we will see a number of challenger providers come in to eat incumbents' lunch with differentiated product packagings and a fresh respect for their customers," he added.

Advertisement