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Mikhail Fridman, German Khan invest $50 million in wireless internet mobile service provider startup

mikhail-fridman_and German Khan - Getty


LetterOne (L1), the investment fund owned by Russian billionaires Mikhail Fridman and his business partner German Khan,  today announces a strategic partnership with startup FreedomPop, the disruptive California based wireless internet mobile service provider.

It is the second funding round for FreedomPop, which raised $30 million last year led by Partech Ventures.

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Headquartered in Luxembourg,  LetterOne recivied clearance from the Committee on Foreign Investment in the United States (“CFIUS”) to complete its $50 million investment in FreedomPop, announced earlier in the year, to assist and accelerate FreedomPop’s international expansion.

FreedomPop buys mobile capacity from networks and offers free contracts to users who sign up to its service. It makes money when customers use up the free portion of calls and data and buy more capacity.

The deal is the second high-profile investment made by LetterOne after it invested $200 million in Uber in February. The fund, plans to invest $2-3  billion in mid-to-late-stage technology growth opportunities,  although FreedomPop represents an investment in a younger company.

L1 is investing in, and looking for strategic partnerships with, leading digital pioneer companies around the world. It is looking for the next generation of OTT customer’s propositions.

FreedomPop, one of the fastest growing mobile service providers, extended its disruptive “Freemium” business model from the US to the UK and Spain earlier this year. Having successfully proven the capability to deliver free mobile service beyond the US, FreedomPop plans to open an additional 8 markets by the end of next year with the continuation of this fast rollout across Asia, Europe and Latin America thereafter.

L1 is partnering with FreedomPop to extend its deep operating relationships and knowledge of, emerging markets and telecoms which will be crucial in helping FreedomPop achieve its global targets. In addition, L1 is assisting FreedomPop to better compete in an increasingly digital and OTT centric world.

“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”, he said.

“L1’s expertise will be used to accelerate our international expansion, ” added Stokols. “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, ” he added.

“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.”

Fridman, Russia’s second-richest man, founded LetterOne in 2013 after receiving $14 billion from the sale of his stake in oil company TNK-BP to state-run Rosneft.

It has said in the past that it expected to surpass the 1m customers mark in 2016, but has not confirmed that it has achieved that milestone The FT reported.



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