I mean, we’re doing that now in Europe with Netomnia. We’re rolling out the Tier 2, Tier 3 markets in the UK. With a lot of success, we got a great management team. He’s building it 20% to 30% cheaper than his competitors, and his penetration is 20% to 30% higher and his ARPU is about the same. So that’s the situation where we saw a very specific set of skills and a management team that had comparative advantage. And they weren’t just chasing homes in London. They were focused on the Tier 2 and Tier 3 markets where there’s less competition. So the investment thesis stood up. Same thing in Chile, we have a wholesale residential fiber business, but we also have a business that same business also sells directly to home, where we’ve seen under-penetrated homes, a lot of streets, where we’re going down the street and we’re the only fiber carrier.
And so we will play in residential fiber, Eric. We’re just doing it through Mundo and through Netomnia and doing it very carefully and very surgically. I think there’s probably a little more pain left in residential fiber in Europe and the U.S. And we’re going to watch it carefully, and we’ll play. I mean, Beanfield is our Canadian residential and enterprise fiber place, mostly focused on Toronto, Montreal, and it’s done really well. We sold a third of that to OMERS for an incredible multiple. They’ve been a great partner and they’re providing a ton of primary capital. And we’re going into Toronto and Montreal, and we’re facing Rogers and Bell who are very formidable and we’re taking market share. But it’s hard, it’s a tougher business, Eric.
It’s not like signing a 15-year lease with Microsoft or a 25 or 30 year lease with Deutsche Telekom. You got to wake up every day, get in the trenches, you got to fight. And that’s the fight we’re up for, but it’s got to be priced correctly. The equity has to be priced correctly.
Operator: Our next question comes from Jon Atkin with RBC.
Jon Atkin: Wanted to ask you about the comments you made about small cells and the scripts, and maybe focusing on outdoor small cells. You sounded a little bit more positive than you have in the past. What’s driving that in terms of U.S. demand and how capital intensive is that for ExteNet and maybe any of your other platforms? In other words, are you seeing sort of same-store lease up on existing plans or are you having to kind of build to meet the demand?
Marc Ganzi: Well, look, I think the reason we see optimism is because we’re watching our pipelines at Boingo and ExteNet and FreshWave. And also our Latin tower businesses like Highline and ATP, EdgePoint in Asia, all these businesses have small cell divisions. And we’re not only seeing green shoots, we’re seeing bookings. And we’ve seen a turn in the bookings at ExteNet. We’ve seen a really big turn in bookings in Boingo. Look, there’s close to — as you know, Jonathan, there’s a little under 0.5 million small cell stay in the U.S. depends on whose numbers you believe. And Jonathan, what do you count as a node or what’s not a node, right? What I can tell you is, we believe the reforecast on small cell growth between now and 2030 is about 1.1 million to 1.2 million nodes.
So we think there’s about another 600,000 to 700,000 nodes that will be built and we’re talking to our customers and look, yes, some of it will be self-perform, but even now in this market where the cost of capital has gone up, our conversations with all four of the U.S. carriers have picked up significantly. I know at ExteNet, for example, they just signed a new MLA with DISH and DISH now has capital and they’re going to put some money to work in small cells. But all three of the major carriers are also putting money into small cells. Now, while CapEx has been curtailed, if we can come in and provide a good solution, the carriers are willing to listen provided they don’t fund the CapEx. So we’re seeing more opportunity, we’ve seen our pipelines grow.
I think you saw a little bit of that color from Crown. I think there was a competitor research paper out today. I think, one of your competitors had a non-deal roadshow with Crown and they were talking about same thing. They’ve seen an increase in pipeline. So I see a market that’s growing. This is exactly what happened with 4G. We spent the first 3 years in LTE, basically doing macro overlays one for one. And then when ultimately LTE moved into 2015, 2016 and moved into densification, it was all small cells and it was a little tougher on towers. We’re probably another 6 to 9 months away from hardcore densification ramping on 5Gs, but we’re starting to see it. It’s starting to happen. So I am very optimistic around small cell growth. And we’re looking forward to putting more capital to work, raising more capital at these platforms and investors understand it.
We’ve been out there talking to them about it. And it’s not just small cells for the carriers, but you have to think in other dimensions. You have to think about IoT networks, private 5G networks. And then, of course, as generative AI starts to penetrate towards the edge and moves towards mobile edge, we’ve always talked about how generative AI ultimately is going to be dispersed in low latency environments that are less than one-tenth of a millisecond. The only way you get there is through small cells. That’s the only way that you’re going to have true autonomous vehicles, true machine to machine learning and true public safety that has true early responders getting in front of the threats is by having essentially a no latency environment, and small cells take you there.
We’re very constructive on how AI is going to change the small cell space in the next 5 to 6 years.
Jon Atkin: And then maybe just pivoting briefly, but anything you could elaborate on in terms of updating us on your venture strategy and things you’re looking at?
Marc Ganzi: Well, look, I mean, now that we’ve announced the closing of the third fund, the first closing, it’s — we can start to pull back the curtain on what we’re doing. What I would tell you is we built a really good diversified Fund I and diversified Fund II, we did 10 investments, 13 investments. In this fund, same thing, we’re targeting, 12 to 16 investments, probably check size is a little smaller is what I would tell you. We’re very constructive on Asia. We’re a little less constructive on Europe. We’re certainly constructive on the U.S. and Canada and Latin America. So, what I would tell you is our strategy is much of the same. But if we’re thinking about that strategy, we’re seeing a lot of positive things in Asia.
We’re seeing a lot of positive things here in our home market in North America. And there’s a couple of interesting things in Latin America and Europe is just going to be a tough road out, those guys have a much tougher road. So as we’re thinking strategically about where to deploy capital, Europe is probably third or fourth on my list right now. The U.S. and Asia stand to be one and two. And then in terms of sectors, we like — of course, we like data centers that face AI. We do like wholesale fiber that again faces AI. We do like private 5G networking. We do like small cells, that’s a thematic that we like in our new strategy. And then, if there’s a right tower opportunity, if it’s EM or if it’s in the primary world, we’ll look at towers.
We think we’ve got some great companies, but there’s always room to further invest. And then the last thing I would say is we have spent some time thinking about how to grow the private cloud, we’ve had so much success at Switch. The question is, can we translate that success to Europe and Asia? So we’re working on that really hard right now. Private cloud networking and owning private cloud infrastructure that’s highly secure, there’s a huge market for that. And no one’s doing it. No one’s doing it the way Switch does it. So now that we’ve owned that company for almost a year, we feel like we have the DNA to take that strategy forward. There’s some other things we’re working on that are proprietary. But now that we’ve got the third fund closed, the next strategy closed, we can deploy capital from that strategy.
So you’ll start to see some new deals announced here in this quarter. As I said, we’ve got a big pipeline. We’re tracking over $30 billion of new ideas in our pipeline. Our pipeline has never been bigger in terms of new platform formation. So we’re excited. This is a big call today. It was important for us to get the first close done, it was important for us to turn on the billing and activate those fees, everyone loves those fees. And then, of course, go execute. And so what you’ll see from us going forward is now new deals, new execution and continued thinking around DPI and how we return capital back to our investors. So it’ll be a busy fourth quarter for us, Jonathan, and we’ll look forward to hosting you hopefully soon down in Florida.
