FreedomPop Inc., the Wi-Fi-based wireless carrier backed by Skype co-founder Niklas Zennstrom, said it has raised $30 million in funding led by Partech Ventures.
The funding includes existing backers DCM Capital and Mangrove Capital as well as an unnamed strategic investor, FreedomPop said Wednesday in a statement. The startup talked with six potential buyers, then opted to raise a new funding round, Chief Executive Officer Stephen Stokols said in an interview.
The round values the company at nine figures, which is lower than some of the buyout offers it received, Stokols said. It brings total funding to $52 million, including debt and equity from Zennstrom’s Atomico investment company. FreedomPop may seek to raise another $50 million to $100 million in a year, Stokols said. It had previously hired Raine Group LLC to explore strategic options, including a sale, Bloomberg reported in March.
“We should be able to increase our value by three to four times in 12 months if we execute on half the things we want to do,” Stokols said. “It just seemed premature to sell right now. This has the potential to someday get to $1 billion valuation.”
Based in Los Angeles, FreedomPop offers free and low-cost wireless service using Wi-Fi connections when they’re available and Sprint Corp.’s cellular network the rest of the time. With Wi-Fi becoming more prolific, it means that a provider like FreedomPop can rely on Wi-Fi most of the time and connect to Sprint’s network only to fill the gaps.
FreedomPop is doubling its subscriber base every four to five months, and expects to reach 1 million users this year, Stokols said. It plans to use the funds raised to continue to expand internationally, covering as many as 15 countries by year-end, and to improve its customer service, he said.