FreedomPop, a startup that specializes in “free” mobile voice and data services to the cost-conscious, said it has declined “multiple M&A offers” and will instead look to accelerate its growth following a $30 million “B” round.
With the new round factored in, FreedomPop has raised about $52 million. The B round was led by Partech Ventures, along with participating from DCM Capital and Mangrove Capital. A new “strategic investor” is also being added to the round and will be announced later, the company said. Partech Ventures general partner Mark Menell will be joining the FreedomPop board.
Stephen Stokols, CEO of FreedomPop, said the company avoided the temptation to sell because it believes FreedomPop’s growth trajectory will position it to be available at higher valuations down the road, and that FreedomPop wanted to control its own destiny.
FreedomPop’s valuation is “nowhere near where we think it’s going to be in a year or two years’ time,” he said. “There was a lot of stuff that we were just on the cusp of doing. It felt premature to sell at this point.”
FreedomPop said it turned down “multiple” M&A offers. Stokols wouldn’t identify them by name, but said the group included a mix of U.S. carriers, including MSOs, Internet companies and VoIP service providers that were looking to pivot into the mobile arena.
FreedomPop said it will now look to expand its free mobile service (its devices provide a set amount of its free text and voice service before tiered pricing plans apply) to more countries and boost distribution through new “offline” retail partnerships (the bulk of its sales are done direct via the Internet and through affiliate electronic retail partners such as GroupOn). The company intends to line up some offline retail tests in time for the 2015 holiday season with “at least one, if not two, big name retailers,” Stokols said.
FreedomPop, which launched its free phone service about 18 months ago, claims that it is nearing 1 million subs. It’s in the process of rolling out in the U.K. this summer and expects to expand further into Europe later this year.
FreedomPop is looking to expand as it continues to compete with traditional mobile carriers as well as with Project Fi, a new service from Google that will start at $20 per month and will run on pre-vetted WiFi hot spots and Sprint’s and T-Mobile’s U.S. 4G LTE cellular networks. Cablevision Systems, meanwhile, has launched a WiFi-only service called Freewheel.
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