Connect Humanity works in underserved communities — primarily rural and low-income — that are most affected by the digital divide. In the US alone, over 120 million people lack affordable, reliable broadband, with low-income and rural households 30–40% more likely to be unconnected. That's the population of the five largest states combined: California (39m), Texas (31m), Florida (23m), New York (20m), and Pennsylvania (13m) This lack of access is a fundamental barrier to education, health care, economic opportunity, and civic participation that fuels disparities and inequities.

The digital divide disproportionately impacts low-income, rural, and BIPOC communities who are 33% more likely to be located in broadband deserts or have little to no broadband internet available. The lack of access to a reliable internet connection can have a profound impact on social outcomes and economic mobility:

• Households: 1 in 3 children cannot do their homework; 80% of new jobs are posted only online; rural patients driving 12 hours without telehealth access;

• Communities: employers asking for ubiquitous internet before establishing corporate/industrial parks; connectivity linked to population and GDP growth;

  Systemic: marginalized communities underrepresented in data impacts services (e.g., racial bias in facial recognition, fintech perpetuating redlining, medical misdiagnosis), exacerbated by generative AI.

Despite the US government investing $5075B , historically marginalized communities still experience insufficient access and affordability. This is driven by three major failures:

1. Failure of private markets. Incumbent telecom business models, minimum ROI thresholds, and preferences for mono/duopolies price out low-income communities.

2. Failure of regulations. Policy decisions not acknowledging the utility-like nature of broadband, flawed maps and definitions of un/served, and telecom lobbying spend at 25-year highs , all burdening marginalized communities with nowhere else to go.

3. Failure of capital markets. The primary sources of capital for broadband are typically federal/state grants, municipal capital markets, and private equity. Most low-income communities have insufficient access to these capital sources; those that do have access lack the representation to ensure that community-interest is served, not just for extractive returns.

Investment Opportunity

Broadband is a strong investment class: long-term asset with hard collateral, utility-like cashflow with predictable demand, and asymmetric/uncorrelated risk providing a partial inflation hedge. Average monthly household broadband consumption continues to grow at a 38% CAGR, projecting to reach 1 TB by 2028 (from 587 GB in 2023. Households also prioritize internet service, with 42% willing to reduce other household expenses to afford their monthly subscription.

We believe COMMUNITYCENTRIC broadband is an even stronger investment class. Inclusive network design, thoughtful community engagement, and localized business models enable internet services that more effectively target low-income communities. Whereas typical network deployments default to a 2030% take-rate assumption and lean on higher monthly prices to make economics work, we see community-centric broadband invert the dynamic: achieving profitability through take-rates of 6080% with affordable monthly prices. Thatʼs the model needed to bridge the digital divide for historically underserved communities.

Community-centric broadband historically outperforms incumbents. This is not an argument of impact over returns; community-centric broadband delivers impact AND returns. For the last four years, the top 10 internet service providers (ISPs) have NOT been brand-name incumbents with one exception: Verizon was 7th and 10th in 2019 and 2020, respectively. Community-centric ISPs continue to outperform when ranked by best network speeds and service quality. The average upload/download speeds for major incumbent ISPs were 57% slower than those of the community-centric ISPs that made up the top 10.

Through speaking with almost 200 ISPs, we found that (a) all are small- and medium-sized businesses, (b) most were founded by someone from the community to serve the community, and (c) all lacked access to capital. Access to capital, particularly structured credit that provides non-dilutive, flexible capital that understands broadband project economics, high quality network design and deployment, and best practices in customer and community engagement.

Investment Strategy

The US is home to 3,000 registered ISPs, over 60% of whom serve less than 500 census blocks and 25% serve less than 70 blocks (aka hyper local). The current capital sources for community-centric ISPs are federal/state grants (often with requirements favoring incumbents), municipal capital markets (inaccessible for low-income communities), private equity (not incentivized to serve low-income), and local/commercial banks (onerous collateral/guarantee requirements). But the underlying nature of broadband demonstrates attractive credit attributes:

• Long-term asset with hard collateral (i.e., 3050 year lives for fiber)

• Predictable demand with low volatility (i.e., increasing bandwidth consumption)

• Asymmetric, uncorrelated risk with inflation hedge (i.e., utility-like, inelasticity)

Small- and medium-sized ISPs need structured credit solutions that understand the economics and realities of broadband, with thought partnership on network deployments and expansion. There are insufficient capital providers with this profile. And this is the niche where Connect Humanity operates. We provide structured loans and revenue-based financing products from our experiences rooted in operating ISPs and investing in infrastructure. Our approach intersects the rigor of private equity/private credit in underwriting WITH community and stakeholder engagement for impact and optimal take-rate WITH post-investment portfolio engagement to problem solve construction and operational barriers.

Connect Humanity's multidisciplinary investing converges to protect both financial returns (less project risk) and the marginalized communities the network is intended to serve. In many of our investments, where the market created digital redlining, we see unserved, potential subscribers with the opportunity to build deep-rooted, long-term trust with the community. We have been recognized by ImpactAssets 50 as an Emerging Impact Manager.

Track Record and Opportunity

Through a $4M proof-of-concept fund, Connect Humanity has tested this investment strategy across a portfolio of five investments. This portfolio contains a mix of term loans and revenue-based financing collectively tracking a 12% gross IRR. Breaking down portfolio IRR, term loans are yielding 9% while RBFs 22%. While some investments are higher performing than others, our aggregate portfolio demonstrates the value of a blended finance approach.

We seek to scale our impact with the raising of a $50M private credit impact fund to expand broadband in rural and low-income communities. With $20M pre-diligenced and a $120M pipeline, we aim to deploy fully in 2 years, targeting a 15-17% net IRR.

To date, our investments are connecting +160,000 people (88% communities of color, 65% low-to-moderate income households, 75% minority- and woman-owned businesses) to high-speed internet. We are tracking a 22% gross IRR with UCC1 seniority and collateralized positions. Recognized by ImpactAssets 50, the Federal Reserve, SSIR and others, the Community Broadband Fund offers a unique impact opportunity with market-rate returns.

Broadband is consistently recognized as a super social determinant of health, serving as the foundation to close other social and economic disparities. In Macon County, AL, our $500k loan has had the ripple effect of generating $180M of additional private investment, creating 2,000 jobs, connecting 3,000 patients to telehealth services, and adding $35M of annual economic activity. 

Increasing broadband penetration by 10% increases GDP by 1.5%. The Community Broadband Fund targets broadband deserts, expecting to connect +50% of the community and leading to outcomes across a range of areas, including:

• Education: closing the gap where one-third of US children cannot complete schoolwork due to inadequate internet; creating equitable access to digital skills, STEM, AI-driven tutoring and more;

• Healthcare: expanding access to telehealth and reducing rural patients traveling 1-2 hours for care, enabling remote monitoring for chronic illnesses and emergency response, supporting mental health services and specialist visits where healthcare shortages are acute;

• Job creation: facilitating re- and upskilling through online certifications, apprenticeships, and workforce programs in a digitizing economy where 80% of jobs are posted only online and a growing number of jobs are remote;

• Civic participation: enabling access to government portals and public benefits, providing access to digital civic tools like online voting registration, town hall participation, and grassroots advocacy; and,

• Community economic development: accelerating entrepreneurship (e.g., online submission of new business forms, access to entrepreneurial resources and funding), investment from the private sector, and local wealth creation (e.g., access to financial planning, increasing property values).