Earlier this week LetterOne (L1), an international investment group controlled by Russian billionaire Mikhail Fridman, announced that it had received clearance from the US authorities for a $50 million capital injection in FreedomPop.
Founded in 2012 and based in Los Angeles, California, FreedomPop offers wireless data, voice and text services. Presenting itself as “one of the fastest growing and most innovative mobile service providers in the world,” the company has already extended its “disruptive” freemium business model from the US market to the UK and Spain.
L1’s capital injection will help the company open eight new markets by the end of next year across Asia, Europe and Latin America thereafter. In addition, L1 will “assist 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,” stated FreedomPop CEO Stephen Stokols.
“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 added.
It is the second funding round for FreedomPop, which raised $30 million last year in a round led by Partech Ventures, notes the Financial Times.
From bank, to oil, to technology
Fridman was born in 1964 in Lvov (Lviv), Ukraine, which was, at that time, a part of the Soviet Union. After graduating from the Moscow Institute of Steel and Alloys, he began his entrepreneurial activities in the early days of Russian liberal reforms. In 1989, together with college buddies German Khan and Alexei Kuzmichev, he founded Alfa Group, which later became a leading financial and industrial investment group in Russia.
In 2013, with billionaire partners Viktor Vekselberg and Leonard Blavatnik — who also invest in technology — he sold a 50% stake in joint oil venture TNK-BP to state-owned oil company Rosneft for $28 billion. Fridman got $5.1 billion in the deal, according to Forbes, which estimates his current net worth at $13.2 billion.
Fridman is a member of the International Advisory Board of the Council on Foreign Relations (USA) and the Board of Russian Union of Industrialists and Entrepreneurs. He has Russian and Israeli citizenships.
L1’s assets under management amount to approximately $25 billion (as of December 31, 2014), with portfolio companies operating in 32 countries. The sources of these assets are funds from the sale of TNK-BP as well as from assets invested prior to L1’s formation — including VimpelCom, Turkcell and private equity investments.
The group invests in the energy and technology sectors, as well as in treasury equity. L1 also is a passive investor in private equity funds managed independently by Pamplona Capital Management.
Earlier this year, L1 made a “strategic investment”of $200 million in Uber.
