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Gateway Fiber Expands from Missouri to Minnesota

After building out fiber networks in a few small Missouri communities on its own in 2019, Gateway Fiber received a combination of private equity and federal grant funding that enabled it to expand its all-fiber network to over 21 communities in the St. Louis western metro area. Its success has led it to add Minnesota to its service footprint, using the same business model and practices to compete against legacy incumbents in both the cable and telecom fields.

“We’ve been in business about five years,” said John Meyer, Chief Marketing Officer, Gateway Fiber. “The first two years were focused on building one or two very small communities without the support of a private equity partner. Since then, we’ve gone from serving 1,000 homes to serving tens of thousands of customers, starting from scratch with fiber to the home and focusing on reinventing the relationship people have with their internet service provider.”

Gateway Fiber’s approach starts with simple transparent pricing and quality customer service and builds upon that approach by “acting and thinking local,” said Meyer, by being an active participant in the community through sponsorship dollars and various give-back initiatives, all the while building up its internal capabilities and customer support team to scale as the company continues to grow.

Gateway Fiber moves into Minnesota Source: Gateway Fiber.

Money to build first came through seed funding by the company’s founders, followed by Crosstimbers Capital Group investing private equity in 2020. CBRE Investment Management acquired the equity position in 2023. Grants have been awarded through ARPA and NTIA federal programs for a total of $35 million.

“The grant portion is not how we’re funding our growth,” said Meyer. “It’s subsidizing areas where the economics are not as attractive as a business to build. Through those [federal] funds, we can deploy our resources and help serve those homes, extending our network into more rural areas. Many of these communities have been screaming for us — or anyone — to come. Deploying fiber optic internet to their houses is a big deal and it’s changing their lives.”

Gateway recently added a 2 Gbps tier to complement its 300 Mbps, 600 Mbps, and 1 Gbps offerings. Services are delivered with Calix equipment with Wi-Fi included and provisioned using Plume, with its suite of parental controls and monitoring and security features. “We try to pack in as much as we can into our flat-rate, all-inclusive monthly broadband service prices starting at $65 per month.”

Add-on services available on the residential side include VoIP and third-party streaming options. “We’re acting as the conduit for helping people migrate away from their tangled web of bundled contracts for phone, broadband, and TV,” said Meyer. “We have partnered with DirecTV and MyBundle.TV to deploy additional streaming options. We don’t want to be in the TV business. We want to be an educator and a value-added partner to our customers to help them cut the cord and find ways to save money.”

Success in Missouri has led Gateway to take the next step by launching services into Minnesota, with its first deployments into the northern suburbs of Blaine and Coon Rapids and the first customers expected to be lit up before the end of the year. “We have developed a very capable, and of course I’m biased, an industry-leading new market selection team and that team helped us identify our new state.”