Freemium MVNO FreedomPop gets $50 million investment for international push

The investment just keeps coming for disruptive US MVNO FreedomPop as it looks to expand its freemium mobile subscription model internationally.

Just months after a previous $50 million financing round the company has announced a ‘strategic partnership’ with investment company LetterOne (L1), which has Russian oil billionaire Mikhail Fridman as its Chairman. L1 has a portfolio of tech sector investments, including a recent $200 million investment in Uber, and sees an opportunity for FreedomPop with the right level of investment.

“This partnership illustrates the value and impact that L1 Technology can have, particularly versus traditional private equity and later stage venture capital investors,” said Stephen Stokols, FreedomPop’s CEO. “L1 is not only capable of bringing significant capital, but also delivering valuable and accretive strategic partnerships for digital pioneer companies around the world. L1’s expertise will be used to accelerate our international expansion. L1’s unique ability to open new markets and new growth opportunities will deliver real value for us beyond what any typical late stage investor could do.”

“FreedomPop are true digital pioneers,” said Alexey Reznikovich, L1 Technology’s Managing Partner. “It is disrupting the businesses of traditional mobile carriers by giving people ways to use mobile devices free of any call charges. As the telecoms market consolidates, and technologies advance, it’s important to remain ahead of the curve in terms of new customer propositions.”

The freemium model, which relies on enticing customers with the offer of free stuff with the hope of up-selling them to a paid-for premium service subsequently, is common on the internet but novel in the mobile space. There is presumably significant risk associated with this approach and investment needed to cover both this and the rush to scale that typifies the model. L1 seems to be a long-term investor so this should take FreedomPop’s growth to the next level.