USA Today report, Sprint is in talks to either acquire or make a substantial investment in Sprint data-only MVNO FreedomPop. The report puts the value of FreedomPop at $250 to $450 million.
This isn't the first time FreedomPop has been mentioned as a possible acquisition target. Back in August, Bloomberg Businessweek reported that two mobile operators were seeking to acquire FreedomPop. One was a US based company, possibly Sprint, and the other an unnamed international carrier. At that time, Bloomberg estimated FreedomPop's selling price at over 100 million dollars. For the price to go from $100 million to as much as $450 million in just three months suggests there's quite a bidding war going on. Indeed the USA Today article claims that in addition to Sprint, a smaller mobile operator and a "large U.S. technology company" are also negotiating to buy FreedomPop.
This flurry of acquisition activity is all the more surprising given that FreedomPop's most popular plan is its free mobile phone service which includes 500MB of data, 200 VOIP minutes and 500 texts per month at no charge. FreedomPop, which claims to be profitable, makes its money on overage charges and by upselling customers to paid plans.
A nine figure acquisition price would represent a very nice return for FreedomPop backers which include Mangrove Capital and Skype Founder Niklas Zennstom's Atomico. They provided FreedomPop a total of $12 million in seed money. On the other, as a FreedomPop user, I'm worried that a buyout would likely mean the end of my free service.
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