US MVNO Cape raises $61 million for 'privacy-first' mobile service

Based in Washington DC, it's called Cape, and it would like to know as little about you as possible.

Cape is a full MVNO hosted on UScellular's network. Currently operating in early-access, invitation-only mode ahead of its nationwide commercial launch later this year, its website explicitly urges prospective customers not to trust it.

"Cape doesn't ask for personal information, like your name or social security number, to give you great cell service. We don't even store your payment information, including your credit card number or address, and your bills are stored locally on your device," says the blurb.

It also claims to offer AI and machine-learning (AI/ML)-based spam protection that can reduce unwanted calls and texts by 90%. It also says it can protect customers against SIM-swap attacks.

"The founding team and I started Cape because we believe privacy and security are inherently valuable," said CEO John Doyle, in a blog post this week. "Control over your personal information is critical to autonomy and freedom. You can explore new ideas and take risks when you know that your privacy is protected."

While Cape doesn't want to know much – or indeed anything – about its users, it would very much like it if everyone knew that it just raised $61 million in a funding round led by San Francisco-based venture capital firm A*, and Silicon Valley's Andreessen Horowitz.

The latter positions itself as a champion of the little guy. It is morally opposed to a centralised Internet controlled by a handful of ad-funded giants – it's singing from the same hymn sheet as Cape, basically.

As for Doyle, he used to head up data analytics giant Palantir's national security business, which he says gave him an insight into the "wide array of vulnerabilities" in cellular networks that represent a threat to people and organisations.

"I came to see mobile phones – and the networks that power them – as perhaps the largest risks to our privacy and security," he said.

The average US citizen doesn't need years of experience working at Palantir to know that their privacy and data isn't necessarily safe with their telco.

Memories of famed whistleblower Edward Snowden and his revelations regarding mass surveillance by US spy agencies still linger, and then of course there are the sadly all-too-frequent data breaches to consider.

The most recent of those affected some 73 million current and former AT&T subscribers earlier this month. The same telco was hit in January 2023 in an attack that compromised the details of 9 million users.

Un-carrier T-Mobile has proven on multiple occasions to be an un-worthy custodian of subscriber data. Its most recent breach, last January, affected 37 million accounts.

Herein lies the challenge for Cape.

Many users these days are resigned to the prospect of their information accidentally being leaked by their carrier, and that apathy might prevent them from going to the effort of switching to a niche MVNO like Cape. Many more are resigned to the idea of their service provider selling their information to advertisers.

"I spend a lot of time talking to people about privacy and security, and I've come to recognise a familiar and pervasive learned helplessness – 'They already know everything about me anyway,' 'That ship has sailed,' or, 'I have nothing to hide, so why does it matter?' I believe this helplessness comes from a mistaken sense that the problem is too big to be solved," said Doyle.

"The problem is too big to solve all at once, but it can be broken down into a series of smaller technical challenges and solved feature by feature, each of which makes progress towards our goal of connection without compromise," he said.

It's a polished riposte. However, Cape's mission to safeguard its customers' privacy also raises the issue of how its capabilities could potentially be exploited by criminals who wish to remain anonymous – or at least harder to track down – as they coordinate and carry out their nefarious deeds.

A Cape spokesperson told Telecoms.com that the company abides by CALEA (the Communications Assistance for law Enforcement Act), which requires telcos and vendors to employ surveillance capabilities to comply with legal requests for information. It also complies with e911, which provides a caller's location to emergency dispatchers.

"We recognise the role and importance of law enforcement in an orderly society and at the same time we believe that there is value to US interests in reintroducing privacy to the commercial cell network," Cape said.