Russian billionaire behind $50M investment in FreedomPop

Mikhail Fridman, founder and chairman of the LetterOne Group. Photo credit Flickr user LetterOne Group.

Turns out a Russian billionaire is behind that $50 million funding score that FreedomPop announced in January.

LetterOne Group (L1), an investment vehicle headquartered in Luxembourg and owned by billionaire Mikhail Fridman, announced today that it had received national security clearance from the U.S Committee on Foreign Investment to complete the investment. The move is part of a larger plan by L1 to invest $2 billion to $3 billion in mid- to late-stage technology companies that provide opportunities to tap OTT opportunities.

In February L1 announced a $200 million investment in Uber.

Indeed, FreedomPop’s core MVNO business paves the way for it to support a variety of OTT offerings. Two weeks ago it began offering U.S. customers zero-rated data from WhatsApp, enabling its users to send texts, videos and other content without incurring data charges.

FreedomPop has expanded from its U.S. base into the U.K. and Spain this year, and in April it launched zero-rated WhatsApp service to users in Spain. The two companies don’t have a formal partnership, however.

FreedomPop uses Sprint’s network in the U.S. and offers a free plan that includes 500 MB of data, 200 minutes of voice and 500 texts per month. CEO Stephen Stokols told FierceWireless recently that the carrier launched zero-rated WhatsApp access as a way to enable users to access mobile data without also paying for voice and text services.

The wireless service provider said it plans to launch an additional eight markets by the end of next year in Asia, Europe and Latin America. FreedomPop has raised more than $109 million in financing including L1’s $50 million Series C round.

The company uses a freemium model to entice users, then upsells them into bigger packages or other value-added services such as selling additional local numbers for users in foreign lands or a new “safety mode” that prevents overage charges.

The companies said L1 will help FreedomPop expand its partnerships in emerging markets and help the MVNO compete “in an increasingly digital and OTT centric world.”

"FreedomPop are true digital pioneers,” L1 Managing Partner Alexey Reznikovich said in a press release. “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."

Mustafa Kiral, a senior partner at L1, will join FreedomPop’s board of directors.

For more:
- see this L1 press release

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