FreedomPop Rakes In Another $5 Million to Fund Free Mobile Service
Upstart mobile provider FreedomPop is announcing on Thursday it has raised a further $5 million from existing investors, bringing its total funding to $16 million.
“We don’t need the money, but at the same time, we are getting a valuation that is [twice] where we were five months ago,” CEO Stephen Stokols said. The company also said that Nextel co-founder Chris Rogers will be added as a board adviser.
Backed by Skype co-founder Niklas Zennstrom, FreedomPop’s business model centers around giving away a certain amount of free basic connectivity and making money off of other premium services. FreedomPop raised $4.3 million from existing investors back in February.
FreedomPop will use some of the extra money it is raising to build inventory for its first phone effort, expected to launch in August or September. Stokols said that the company got more than 100,000 preorders the week it announced its phone plans. That’s three times the number that had signed up for its hotspots in the week after those announcements.
“It just gives us all the firepower we need for the phone launch,” he said.
FreedomPop is also planning a shift from releasing devices that run on Clearwire’s WiMax network to those that use Sprint’s LTE network, a move that Stokols said will be accelerated by SoftBank’s investment in Sprint.