Free Mobile Service Provider FreedomPop Grows Steadily and Fast
FreedomPop, the startup mobile operator has been standing out with its free mobile data and voice services since founded in 2012. The company received seed fund from venture firm Atomico, which is also the founder of Skype. During the last 3 years, it has raised $49.3 million with $30 million from the most recent funding round.
FreedomPop offers its data and voice services bought from Sprint to the customers with no charge. Customers have 2 choices to use the free plans: buying a FreedomPop phone or using an old Sprint phone. Typically a FreedomPop phone is a refurbished Samsung or HTC device. The company currently offers 500MB, 200 voice minutes and 500 text messages per month and expects bumping up to 800MB-1GB per month in the near future.
Most of the company’s revenue is from value-added services and freemium packages. The value-added services include phone insurances, international numbers for foreign customers and anonymous browsing feature et al. Stephen Stokols, the CEO and co-founder of the company says half of their customers pay $14 to $15 per month, which means the company takes in around $7 per customer per month. With a very low overhead and no advertisement cost, the gross margins are very significant.
Before its Series B fundraising, FreedomPop received 6 formal acquisition offers. It finally turned down all the offers and continued fast growing.