FreedomPop Raises $10M Extra, Inks Strategic Deal With New Investor, Asian Service Axiata

FreedomPop, the U.S. wi-fi service startup that has been constructing a enterprise based mostly on utterly free voice and knowledge providers, has raised one other $10 million in funding from two strategic buyers, the pan-Asian cellular service Axiata and an unnamed tech investor based mostly within the U.S., the corporate is saying immediately. The cope with Axiata will imply that FreedomPop shall be increasing its free providers into Asia for the primary time.

Axiata is predicated in Malaysia but in addition has operations additionally in Indonesia, India, Bangladesh, Singapore, Cambodia and Sri Lanka (beneath manufacturers like Sensible, M1 and Celcom). Notably, FreedomPop factors out that it’s the largest service in Southeast Asia, with 230 million subscribers throughout its footprint.

In the meantime, a supply near FreedomPop says that the U.S. tech firm investor is a “main tech agency” that may use its business partnership with FreedomPop to “tackle Google Fi at a tool degree and Qualcomm at a chip degree.” The corporate is predicted to announce its partnership with FreedomPop within the subsequent month or so.

The information comes a few month after FreedomPop introduced a $30 million funding, which additionally had an unnamed strategic tech investor that might be working with the service on the hardware aspect of issues. It’s unclear whether or not the key investor is one and the identical firm.

With that hardware partnership nonetheless underneath wraps, Stephen Stokols, the founder and CEO of FreedomPop, is extra prepared to speak about what the corporate plans to do with Axiata.

He says that the 2 might be engaged on a free cellular service that may launch within the subsequent six to 12 months and run individually underneath a “disruptive model” that may both use the FreedomPop identify, or powered by FreedomPop, and “has nothing to do with present Axiata manufacturers.”

The service will work the identical as FreedomPop’s free U.S. service, and the expectation is that the providing in Asia will see an analogous sample of adoption: Stokols says that nowadays, about half the corporate’s almost a million U.S. customers stays on the essential free tier, whereas the opposite half opts to pay for extras like extra knowledge, voicemail and different options.

The Axiata deal is a notable regional enlargement for FreedomPop, tapping into a lot-coveted, quick-rising, populous rising market economies. Nevertheless it’s additionally vital for an additional cause.

Stokols says that the corporate views it as a “blueprint” for a way FreedomPop will broaden in different markets as nicely, with “extra progressive international carriers” viewing free tiers and free providers as a solution to defend themselves from competitors by “embracing disruption.”

He says there are already a number of carriers speaking with FreedomPop for providers just like Axiata’s.

“Not simply [in] rising markets, however some giant developed markets as properly in Europe and elements Asia,” he says. “In some instances, main carriers are seeing this as a strategy to prolong their footprint/attain past their community belongings and in different instances, it’s to cannibalise their very own consumer base versus being cannibalised.”

The trick right here for FreedomPop is that the corporate has developed a approach to purchase wholesale knowledge providers from carriers after which use some tech within the backend to ship the identical sorts of providers that the carriers do, however in a approach that’s extra environment friendly (and cheaper) than what the carriers supply themselves.

This distinguishes FreedomPop out of your common MNVO “digital” operator, which primarily buys minutes, messages and knowledge in bulk from carriers for his or her providers after which resell these to their clients, translating into skinny margins for these MVNOs. FreedomPop, in distinction, buys solely knowledge which it then makes use of to supply the remainder of its providers (for instance, voice as VoIP). As an alternative of prebuying in bulk, it negotiates totally different utilization tiers and pays just for what its clients use.

Now, these carriers need “to have the ability to use FreedomPop’s know-how and functionality as a weapon to make sure their personal networks maintain customers.”

Stokols notes, nevertheless, that there’s decrease restrict to the place FreedomPop may go at present. “If a market is just too beneath developed, our mannequin doesn’t work,” he notes, citing elements of Africa the place community power or cost mechanisms not mature sufficient. However even these areas are usually not resistant to tech-led disruption: Google and Fb are amongst these hoping to fill that hole out there.

Apart type Asia, FreedomPop has additionally been plugging away at its first worldwide deployments in Europe, too. “We’ve got stay check customers in UK now, aiming to launch stay to the general public in subsequent 4 to eight weeks after the August decelerate,” Stokols says.

Different buyers in FreedomPop embrace Mangrove Capital, DCM, Partech Ventures and Atomico, the VC agency co-based by Skype’s Niklas Zennstom.