If you think that your cell phone bill is too pricey, then there is a company called Freedompop that is offering monthly plans for free. Freedompop has recently acquired a large sum of cash to help fund its rapidly expanding business, and they’re literally giving away their services. After rounding up $30 million dollars from investors, Freedompop is ready to compete.
The company started in 2012 out of Los Angeles. Since 2012, there has been a lot of buzz centered around the company because of the free services and cheap phones. The company seems determined to press through a throng of unhappy and larger competitors, and turned down offers to be acquired in favor of pursuing the $30 million. The last 3 years the company has been able to raise over $49 million, and recently received funds from Partech Ventures, Mangrove Capital and DCM Capital. Initially, Freedompop received funding from Atomico. Atomico is the venture firm of Skype’s founder.
The company has no wireless infrastructure whatsoever. They buy what is in their service package wholesale from Sprint. Google does the same thing, but Freedompop is offering the plan for free to attract more customers. It’s working too.
Freedompop is making money despite offering free plans. Customers have the option of getting a refurbished phone or connecting an old Sprint phone. The company then will give 500 text messages, 500 MB of data and only 200 minutes for voice. Beyond that initial offer, the customer can purchase more, pay if they exceed or buy other advanced service packages on top of the free basic plan.
Freedompop is worth several hundred million, and they explored their options, but after seeing huge offers, they ultimately decided to grow simply because they learned just how valuable and competitive they are in the wireless market.