Following months of M&A speculation, 18-month-old FreedomPop announced yesterday (June 17) that it secured $30 million in new financing to accelerate its growth in the U.S. and expand its free mobile service to other markets. “Part of the investment will be in customer service,” CEO and co-founder Stephen Stokols told Techcrunch. “We have been having a ‘nothing’ customer experience, and now we want to have a positive experience.”
Since its launch in 2013 and 1 million subscribers later, FreedomPop has upended the U.S. mobile market by introducing free mobile voice services along with data rollover, Wi-Fi first calls on a nationwide Wi-Fi network, free international calling plans, and more.
Currently, the company’s growth revenue is at around 25% per quarter with gross service margins currently at around 50%, Techcrunch reports. Later during the year, it is projecting to reach Ebitda profitability.
“We received several M&A offers, but we ultimately decided it was premature to sell on the cusp of exponential traction,” said Stokols, who doesn’t exclude the possibility of revisiting M&A activity in 12 to 24 months.
FreedomPop’s next target market is Europe, which is why the Series B is led by Partech Ventures. In fact, FreedomPop will launch its free mobile phone service this summer in the U.K. and later on in Europe. It also launched Jetsetter, the world’s first global SIM that offers free service initially available in the UK, Spain and France. And it also intends to move more aggressively into offline retail partnerships to expand its distribution network.
As part of the financing, Mark Menell, General Partner, is joining the FreedomPop board of directors. Existing investors DCM Capital and Mangrove Capital also contributed to the latest round, according to its blog post. The post also mentions an additional strategic investor who will be announced separately and which, Techchrunch speculates, will bring an additional $5 million.
“We are excited to have FreedomPop as one of the first investments in our new growth equity fund. We believe the company has an incredibly disruptive business model for today’s large and fast-growing global telecoms industry,” said Mark Menell. “This is also largely a bet on FreedomPop’s outstanding management team, who we knew we could partner with from the first time we met.”
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