Onavo Mobile - mobile app - wireless startups - Fierce 15 2012

Where it's based: San Francisco and Tel-Aviv
When it was founded: 2010
Website: www.onavo.com

Why it's Fierce: "We've saved consumers over $5 million so far," boasted Guy Rosen, co-founder and CEO of Onavo Mobile, during a meeting earlier this year at the Mobile World Congress trade show.

It's a pretty far-fetched claim, but Rosen has the facts, figures and--perhaps most importantly--the reputable venture capital backing to weight his statements with credibility. Onavo, which today counts 20 employees, has raised $13 million in two rounds of financing from the likes of Sequoia Capital, Magma Venture Partners, Motorola Mobility Ventures and Horizons Ventures. The top-tier VC firms--Sequoia was the largest VC firm in mobile last year--could help Rosen cash in on the millions of dollars Onavo is saving its users.

Onavo's app, available for iOS and Android, helps users reduce the amount of data they consume. Rosen explained that, in Android, the Onavo app establishes a VPN connection to the company's content delivery network, which leverages the company's proprietary compression technology, and allows users to dial down the amount of data they consume. For example, users can choose to download only low-resolution images, rather than higher-resolution images that require more data. Once installed, the app slims the data requirements across all the functions of a user's phone, from apps to Internet browsing. The company's iOS app uses a similar setup via the iPhone's configuration profile.

For Onavo's "millions" of users (Rosen declined to provide a more specific figure), the service can both help users stay on cheaper data tiers and also monitor their data use, so they know what apps are consuming their GBs. Onavo said its app can help users get up to five times more data out of their existing data plan.

What's next: At the Mobile World Congress trade show, Rosen hinted at several upcoming strategies. He said Onavo plans to engage in a freemium business strategy in the coming months; the company's apps are currently available for free. Rosen declined to provide more specifics. It's no surprise that Onavo is pushing forward on the freemium road: According to research firm NPD Group, four out of 10 consumers who have played a freemium game have made an in-app payment to extend or enhance the gameplay experience.

Also, added Rosen: "We have in the pipeline some very interesting distribution partnerships."

And what of video? "We don't transcode video yet. That's in the works."

Interestingly, though, Rosen said Onavo doesn't plan to offer its technology via a white-label play--for example, allowing a wireless carrier to offer similar services under its own brand. Instead, Rosen said "our top priority is on distribution: Getting our app out to as many users as possible." By going the direct-to-consumer route, Onavo is putting itself into a position that could require more cash and is potentially more risky. However, it also opens the possibility for greater rewards.