With $61M warchest, MVNO Cape to target security

A new MVNO called Cape launched this week. It has received $61 million in venture funding and plans to target the premium end of the mobile market with enhanced security features.

In an interview with Light Reading, Cape CEO John Doyle said the company's nationwide mobile services will launch over UScellular's 21-state regional wireless network. Doyle said Cape will roam onto UScellular's partner networks in locations where UScellular does not operate its own network, though he declined to name those partners.

Doyle also said Cape will run its customers' traffic through its own IMS network core. Doyle declined to name the vendor of Cape's IMS core.

Cape is positioning itself as a "privacy-first mobile carrier." In that effort, Doyle said Cape is working to "own as much network footprint as possible," at least beyond the cell tower. Cape's IMS core – which handles customer billing and activations – is part of that effort.

However, Doyle declined to discuss other details about Cape's network operations or security technologies. He said the company is currently testing various security approaches with some potential enterprise customers and that Cape will offer details on its approach to security in the coming months as it works toward a commercial launch later this year.

Joining the market

Cape is unique in the MVNO market in that it is hoping to target the premium, high-end portion of the sector. Most MVNOs – companies that rent wholesale access to existing mobile networks – target more price-conscious consumers and businesses with prepaid services.

Moreover, most big MVNOs – like Comcast, Dish Network and Consumer Cellular – partner with nationwide wireless network operators like Verizon and AT&T. Few work directly with regional wireless network operators like UScellular.

Cape launched in 2022 and currently has around 30 employees. The company has raised a total of $61 million in venture funding across a seed round, a Series A round and a Series B round. Cape investors include A*, Andreessen Horowitz, XYZ Ventures, ex/ante, Costanoa Ventures, Point72 Ventures, Forward Deployed VC and Karman Ventures. 

Doyle founded the company after a nine-year stint at big data analysis company Palantir, which also provides security services. Before working at Palantir, Doyle was a communications expert with the US Special Forces.

When it launches commercially later this year, Doyle said Cape will not sell phones but will support a bring-your-own-device model.

Rushing in

Cape is one of a number of new MVNOs to hit the market in recent years. Others include big cable providers like Cox and Breezeline, fiber network operators like Allo and startups like MobileX, Roccstar Wireless and Helium Mobile.

Each comes to the market with a slightly different story. MobileX, for example, is coupling AI-powered discounts with Walmart distribution. Helium offers customers a way to expand its coverage network. Cable companies ranging from Comcast to Altice are using mobile to prevent their core broadband customers from churning to other Internet providers.

The potential for a big transaction is also hovering over the market. For example, private equity company GTCR purchased Consumer Cellular for around $2.3 billion in 2020. Verizon purchased TracFone in 2021 for almost $7 billion. And T-Mobile is working to close its purchase of Mint Mobile for around $1.3 billion.

That's not the reason Doyle launched Cape, though. He told Light Reading that his initial goal was to secure connections between wireless phones and networks so that advertisers and others could not access users' data. He said he backed into the MVNO concept in that pursuit.