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?)
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