Carrier WiFi

FreedomPop Grabs $30M More in Funding

Free phone service provider FreedomPop has secured $30 million in series B venture funding and is hinting at an IPO as a potential option within the next couple of years.

The Los Angeles-based startup has now raised a total of $49.3 million in funding since it started in 2011. CEO Stephen Stokols says that the mobile virtual network operator (MVNO) isn't taking up any of the buyout offers it has received but instead considering its options, which appear to include an acquisition or an initial public offering (IPO). (See FreedomPop Grabs $5M to Support Android Push.)

"We received several M&A offers, but we ultimately decided it was premature to sell on the cusp of exponential traction," the company notes in a blog post. "Following on accelerated growth and our pending global expansion, we are confident we will create massive value within the next 12 to 24 months at which point we could revisit exit options."

FreedomPop is an independent MVNO that handles its own customer service but uses the Sprint Corp. (NYSE: S) network to offer voice over IP (VoIP) and data services, as well as running on WiFi. The operator offers a service that gives users a guaranteed 500MB of data, 500 text messages and 200 voice minutes every month free for life. (See FreedomPop Phones It In (for Free).)

Stokols told Light Reading recently that the business is largely unaffected by a change in Sprint's policy towards activating aftermarket devices for its MVNOs. This is because FreedomPop mostly sells devices direct to users. (See Sprint Policy Change Spells Trouble for MVNOs and Gambling on Used Sprint Phones: Are Users Buying a Brick?)

For all the latest news from the wireless networking and services sector, check out our mobile channel here on Light Reading.

The new money will help FreedomPop's ambitions to expand in Europe. The company plans to launch a free service in the UK this summer. The company also launched Jetsetter, a global SIM-based free service that will be initially available in the UK, Spain and France. (See Eurobites: FreedomPop Heads to Europe.)

The $30 million round is being led by Partech Ventures. Existing investors DCM Capital and Mangrove Capital also contributed to the latest round. FreedomPop says that a strategic investor, which typically means a carrier or vendor investment, is being added to the round but isn't being named yet.

— Dan Jones, Mobile Editor, Light Reading

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MikeP688 7/11/2015 | 5:58:57 PM
Re: Disrupt @mhhf1ve:  You're right on this point--because I was working to experiment by utilizing my own iphone4..and because it was AT&T, I couldn't :-(.   But I still was able to install the APP to make phones off Wi FI..but this does not give them much outreach since to your point, many others (such as Skype et. al) already do it--so what's the value?   Plus their customer service left a lot to be desired--i got tossed at least four times..and spent over an hour--but it was part of my on-going research for the @DailyOutsider network anyway...so it was business :-)

mhhf1ve 7/11/2015 | 5:55:51 PM
Re: Disrupt MikeP688, I'm not sure what FreedomPop's contract with Sprint is exactly, but it doesn't seem that impossible to offer users more flexibility with no contract plans? Tracfone seems to do it pretty well -- so freedompop just needs some mass market appeal. Freedompop might have some problems with a restricted subset of Sprint phones, but I think that's why FreedomPop is more of a data play. I wonder if they'll try to combine wifi someday to boost that angle.
MikeP688 7/11/2015 | 4:31:37 PM
Re: Disrupt @mhhf1ve:  I am with your there--the question is long-term viability--although I for one (and I have been on the record) a fan of Spring to succeed because the choice is needed more than before to give the giants a run for their money.     FreedomPop's challenge, though, is to monetize what is doing now--which is not an easy feat...is it? 
mhhf1ve 7/7/2015 | 3:56:01 PM
Re: Disrupt BTW, other MVNOs of note on the Sprint network: Republic Wireless and Scratch Wireless.

Though, Scratch admits that its not going after the giants, as much as the prepaid market.

mhhf1ve 7/7/2015 | 3:12:49 PM
Re: Disrupt MikeP688, I'm not sure why you think being a Sprint-based MVNO is a drawback? Would FreedomPop (or any other MVNO) be better off piggy-backing on another network operator (besides gaining better coverage on a network like VZW)?

It's incredibly difficult to build a wireless network of any usefulness -- that's why Google Fi is on Sprint and T-Mobile. I'm wondering if Google will ever try "bonding" those two wireless networks since Google has control over its Nexus hardsets... it would be so cool to have a smartphone with about double the broadband speeds with a combined Sprint/Tmo connection.
MikeP688 7/7/2015 | 1:12:04 PM
Re: Disrupt So far they seem to be be at the forefront--the question is how they'd sustain this model by monetizing it.   That's the key challenge (as with any new start-up).     Their bigger challenge, to me, is how they are on the Sprint network.   
mhhf1ve 7/6/2015 | 6:57:01 PM
Re: Disrupt Freedompop is definitely a leader in the "free" MVNO space, but there are also some others like Karma... and Google Fi... making some innovative MVNO features, too.

I'm not so sure the big guys will notice these tiny MVNOs since they're piggy-backing off other networks (and there are likely caps to their usage). But users might figure out ways to use these MVNOs more cost effectively than contract plans from the giants.

As I said earlier, disruption is probably too strong... These are evolutionary services to make better services. Google Loon or other ways to provide cell coverage or more unlicensed wireless coverage are more disruptive -- but also a few more years out for deployment anywhere near populated areas. 
mhhf1ve 7/6/2015 | 11:46:11 AM
Re: Disrupt (Briefly) Wifi calling has a chance to disrupt the cell phone industry -- as users figure out that phone numbers are losing their importance. Apps like FB messenger are going to popularize voice chats that don't necessarily need a cell connection. I wonder at what point device makers will jump onboard -- eg. Freedompop made an iPod adapter that essentially turned it into an iPhone.
MikeP688 7/5/2015 | 5:54:40 PM
Re: Disrupt (Briefly) It requires quite a lot of patience--no question.   But what they're doing is proving that progress can't be stopped.    It is also part of the larger question cell companies have to contend with that the Washington Post recently discussed in a very perceptive article by Brian Fung available @ https://www.washingtonpost.com/blogs/the-switch/wp/2015/06/30/the-future-of-mobile-data-pits-cellphone-carriers-against-cable-giants/

Granted, there are profound challenges (and we've discussed it at length here as well)--but this is again part of the evolution that FreedomPop seems to be riding right now--while depending on the largesse of Sprint in some measure.


mhhf1ve 7/5/2015 | 5:17:42 PM
Re: Disrupt I've been using Freedompop's app since it came out -- it's a little buggy but it's great for not using up cell minutes on a prepaid smartphone.
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