VETRO FiberMap Rides the Wave of Massive Investment in Fiber Networks

This is the age of fiber optics. As people eat up an increasing amount of bandwidth each year, a trend driven by increased and changing Internet usage and the introduction of more and more connected devices, internet service providers, or ISPs, are investing billions of dollars annually to build out fiber-optic networks to provide faster broadband service to more homes and offices.

Will Mitchell and Sean Myers were first-hand witnesses to this changing dynamic. Together they had co-founded a company in 2008 called NBT Solutions to build custom mapping solutions for clients across numerous verticals, including environmental services, telecommunications, and healthcare. One of the most active verticals was telecommunications as ISPs were looking for innovative mapping solutions to help them more efficiently plan, build and manage fiber networks.

Recognizing that demand for more fiber would only be growing with changing consumer trends and the arrival of new technologies like 5G, the pair saw an opportunity to ride this wave of investment. Instead of a client-first, industry-agnostic model that required them to constantly say yes to new client projects, they decided to focus their efforts on the telecom industry and pivot from a client-first model to a product-first model.

“We saw a big gap in the tools available and we thought we could fill that gap,” said Myers, who spearheaded the effort to go all in on a mapping product for the telecom industry.

They pivoted in 2014, diverting development resources to creating a cloud-based mapping software platform that ISPs could use to actively manage and expand their fiber networks. In 2015, they unveiled the first product—a software-as-a-service product they called VETRO FiberMap—at a tradeshow in Texas.

While the big players like Verizon and AT&T have the resources for custom enterprise solutions, Mitchell and Myers started off targeting the small- and medium-sized ISPs that are investing in regional fiber networks, especially in suburban and rural areas. Some early users of the VETRO FiberMap product were GWI in Biddeford and Pioneer Broadband in Houlton.

By 2017, Mitchell and Myers had about 25 customers using the platform and providing monthly recurring revenue. But to really seize the opportunity, Mitchell and Myers realized they needed to ramp up investment and rapidly improve the product to add new features and functionality. In 2017, they raised a $1.4 million seed round from investors that included Maine Venture Fund, CEI Ventures, and the Maine Angels.

Since raising that seed round, VETRO FiberMap has completed the transition to a product company (meaning Mitchell and Myers no longer do any custom jobs as NBT Solutions), doubled its team (it’s now at 26 employees, including 20 located at its headquarters in Portland), quintupled its customer base, and built a trusted brand in the industry that’s allowed it to not only attract the smaller ISPs that may have lacked any digital solution when signing up for VETRO, but compete head-to-head with legacy competitors for bigger customers.

Mitchell, who serves as CEO, declined to share revenue figures, but previously said year-over-year sales were increasing at a triple-digit rate.

“2019 is a pivotal year because we have come into our own and hit a stride positioning us for breakout and sustained growth ahead,” Mitchell said. “We are committed to building the best fiber management software system in the world and delivering it globally right here from Portland.”

Riding the fiber wave

While the opportunity is global—VETRO already has customers on every continent except Antartica—the biggest opportunity is actually suburban and rural America, according to Mitchell.

In the United States alone, ISPs are expected to spend between $130 billion and $150 billion building out new fiber networks over the next several years, according to a report from Deloitte Consulting. Currently, only about 29% of U.S. households have fiber connections available, which is expected to increase to about 50% by 2025 based on the current level of investment, according to the Fiber Broadband Association.

The small, regional ISPs had been struggling for a while, but the fiber revolution has really energized them, according to Mitchell. Some of that was driven by the fact that Google Fiber in the early 2010s triggered fierce competition with all the big players to invest heavily to deploy fiber in the major markets, leaving an opportunity for the small- and medium-sized ISPs to focus their investment on bringing fiber to the homes in all the smaller markets around the country.

“What we started seeing was these emulators, these little guys, companies in small-town Maine and small-town Ohio and rural markets—second, third, fourth, fifth-tier markets—trying to follow that lead,” Mitchell told Maine Startups Insider in a previous interview. “So we saw that going on and we’re like we have the tools these guys need to behave like Google Fiber and design more efficiently, build more efficiently, and operate the network more efficiently. They have limited capital, so they have to be really smart with where they build and how they build. So we’re enabling them to do that.”

The SaaS application allows an ISP to not only more efficiently plan, build and manage fiber networks, it also provides business development tools that allow an ISP’s employees to drill down into neighborhoods and estimate what kind of return on investment they could receive if they laid fiber down a single street.

Like many industries, telecommunications companies used to use analog solutions to design and construct network infrastructure. But VETRO is a leading provider of these innovative new tools, according to Kerem Durdag, an investor in VETRO FiberMap who also happens to be president and chief operating officer of GWI, which uses VETRO FiberMap to manage its own fiber networks in Maine.

“VETRO is taking advantage of this tectonic shift in how business is conducted in this eco-system,” Durdag said. “The promise in the company lies in its focused ability to be part of the way business has to be done. As long as it remains an essential ingredient in the urgency of telco businesses to satisfy societal demands, the future is bright for VETRO.”

But building the company hasn’t been without its challenges.

“I would say we were definitely optimistic in our projections on the pace of growth and pace of adoption,” Mitchell said. “Complex software is hard and it takes a long time. Everything has gone according to plan, but everything has taken longer and cost more than we thought.”

Myers adds: “In other words, all the advice we got from people who have done this before was spot on.”

The company has found its stride, though, and Mitchell and Myers are finding they’re able to grab more and more market share as they’ve improved the product and added more functionality. They expect to add 10 more employees over the next year. And, recognizing the need to outpace competition, they’re planning to raise more capital to pour into product development.

“We have an exciting new product line we’re secretly working on for next year,” Mitchell said.