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Broadband 'Freemium' Startup FreedomPop Raises $4.3M Follow-On Round

FreedomPop, the startup trying to challenge wireless carriers and MSOs with free and low-cost Internet access over 4G wireless networks, announced an additional $4.3 million in funding in a “series A1” round from existing investors DCM and Mangrove Capital, bringing its total funding to $11.2 million.

The Los Angeles-based company also announced that it will let users share and request extra bandwidth from friends, and that users will now receive 50 megabytes of monthly usage credits per user they refer -- up fivefold from 10 MB previously.

FreedomPop, which has about 50 employees, launched its “freemium” broadband service for mobile users on Clearwire’s WiMax network last fall, targeting 4G services from AT&T and Verizon Wireless. Users can earn free usage credits for referring friends and engaging in marketing offers, or pay for additional data access. The startup also is launching a home wireless Internet service aimed at competing with cable and telco wireline broadband that promises up to 1 Gigabyte of monthly data usage free, and up to 10 GB for less than $10 per month.

To date, according to the company, FreedomPop has given away more than 2 million megabytes of data access to users for adding friends. On average, each subscriber has invited 15 friends to join FreedomPop with 99% of the startup’s registrations driven by organic traffic versus advertising.

FreedomPop currently offers service via Clearwire’s 4G network and is scheduled to go live on Sprint’s LTE network in 2013. The company, founded in 2011, also is backed by Skype and Joost co-founder Niklas Zennström, through his Atomico investment fund.