Truphone, a UK-based mobile network that lets its users make free or low-cost calls to other mobile devices, has today announced a surprise, large funding injection of £75 million ($118 million) from a group of investors led by Roman Abramovich, the wealthy Russian owner of Chelsea Football Club, among other things. Abramovich’s investment company Minden accounted for £70 million of this investment, giving it a 23.3% stake in the company at a £300 million ($473 million) valuation.
This is the biggest investment yet in Truphone, which has been around since 2006 and had raised $57.1 million prior to today’s news from Straub Ventures, Burda Digital Ventures, Eden Ventures, Independent News & Media (now part of the empire of another Russian oligarch, Alexander Lebedev) and Wellington Partners. The last time the company raised money was in 2008. This newest round represents a sudden boost for a company that has been quietly moving along since then.
Truphone says that it will be using the new investment to expand to new markets as well as increase its staff, with plans to add 500 more employees in the next 18 months.
Truphone’s business is not the stuff of the new age of tech that involves social networks, collaborative consumption or anything of that sort, but it is disruptive all the same for offering users a way of getting around expensive mobile carrier services, especially in the area of international calling.
“Our business is based on a global model, unique in mobile telecoms,” said Steve Robertson, the CEO of Truphone, in a statement. “Staying connected is crucial to the way we live our lives – and the demand for connectivity is growing. This funding round will enable us to continue to bring the promise of a mobile phone service without international borders into new markets across the world.”
Truphone has three parts to its service. The first of these is based on a prepaid SIM card for GSM devices that costs £19.99 ($31), which lets users make cheap calls on their mobile devices to 220 countries, and is also usable as a free local service in the UK, USA and Australia. In these markets, the calls are free.
Now, the plan is to add more local markets this year in the Netherlands, Hong Kong, Poland, Germany and Spain. Partnerships with local providers — as a “virtual” network operator Truphone needs local carrier agreements — are in the works already, it says. These deals, when completed, will “more than double the size of Truphone’s potential market over the next twelve months”, although the company will still need to seal the deal to pick up actual users within them.
The second of these are apps that perform the same purpose as the SIM card but route the calls over the Internet instead of via GSM networks. These are available for iOS and Android devices, with a new BlackBerry app launched just this week.
The third part of Truphone’s business is based around enterprise services. One product is a service that lets businesses make recordings of their voice calls, which are needed in some industries like finance for regulatory purposes. Another involves making deals with large enterprises to use its consumer service to help bring down the cost of mobile voice and data.