SureWest acquisition boosts Yonder Media's marketability

A recent acquisition by wireless Internet service provider Yonder Media of Reno doubled the company's subscriber base and significantly increased its marketability to investors, Chairman and Chief Executive Officer Craig Vallarino says.

Yonder Media acquired the wireless business unit of SureWest Broadband of Roseville, Calif. Terms of the transaction were not disclosed. Yonder Media acquired 11 wireless transmission towers serving Wheatland, Woodland, Roseville, Citrus Heights, Elk Grove, West and South Sacramento, Rocklin, Loomis and Lincoln, as well as SureWest's customers in those areas.

Yonder Media, founded in 2006 and headed by Vallarino, co-founder Sean Duff, director of technologies, and Dirk Christiansen, president and chief operations officer, provides wireless Internet connectivity to underserved rural communities.

The acquisition shows the company is a growing player in the wireless service provider arena, Vallarino says, which should help its efforts to secure investment capital to fund additional expansions.

Vallarino and Christiansen both have extensive backgrounds in venture-backed startups in California's Silicon Valley.

"Acquiring a business unit of a publicly traded company demonstrates our ability to acquire and assimilate a larger entity," Vallarino says. "The ability to demonstrate breadth and business acumen, there is a lot more scrutiny that will come from the investment community."

Vallarino had been in New York meeting with investment banks to raise seed money when he was put in touch with SureWest executives. A deal was struck in about four days. Under the agreement SureWest will continue providing bandwidth and tech support to Yonder's new customers. Several of the Sacramento-area markets don't exactly fit the mold of Yonder Media's business plan they also are well served by Comcast so Vallarino says the company will focus its marketing push into those that do.

Yonder Media started out as High Speed Networks in the Mound House area with the goal of providing high-speed Internet access to Nevada towns not served by Charter, Clearwire or AT&T.

The company installed wireless access points as part of its systems test, trying different wireless technologies to find which worked best and was most scalable to adding large numbers of customers.

From Mound House the company expanded to Silver Springs by purchasing a small provider in that area, and it assumed operations of another small provider serving Virginia City and the Washoe Valley. Charter and AT&T serve much of Dayton, so Yonder Media has not sought out much development in that area.

"Predominantly our model has been to go where others aren't or where they are fairly limited," Vallarino says.

Yonder has grown primarily through grassroots marketing efforts such as sponsorship of youth sports teams or high school sports.

"We do things that will impact the community," Vallarino says. "We probably pick up 10 customers a month simply by referral."

From its modest start, Yonder Media's five-year plan is to expand to markets in 26 states currently underserved by major service providers. The company plans about 150 to 180 networks serving more than 500 communities and 1 million subscribers.

Yonder Media has been profitable since its 13th month, but its founding executives aren't drawing salaries. Instead, they are reinvesting that money back into the company. Duff and Vallarino chose northern Nevada because Duff lives here, but northern Nevada also was a good fit, Vallarino says.

"Nevada is a good market for us. It is everywhere America. Nevada is a perfect prototypical proving ground. We get snow, driving winds, huge heat in the summer. All the things we needed to test had to withstand Nevada deserts."