Armed with $60 million in first round venture funding, Amp'd Mobile is gearing up to battle the giants of the wireless world with the planned launch of its broadband mobile phone services targeting 18-to-35-year-olds.
The Los Angeles-based startup announced it raised initial financing from Vivendi's Universal Music Group of Los Angeles and three venture capital firms: Highland Capital Partners Inc. of Lexington, Mass.; Columbia Capital of Alexandria, Va.; and Redpoint Ventures of Menlo Park, Calif. Amp'd has also taken on an additional $7 million in debt financing.
With the U.S. wireless industry already fiercely competitive, Amp'd plans on staking out a place for itself by targeting only one demographic — 18-30-year-olds — and then offering a slew of content and services through its phones.
So-called mobile virtual network operators who resell other carriers' services under a different brand name are proliferating in the wireless market. The most prominent of the resale arrangement is Sprint Corp.'s joint venture with the U.K.'s Virgin Group, called Virgin Mobile USA. Telecom newcomers such as 7-11 Inc. and Walt Disney Co.'s ESPN sports network are also launching services.
Resale deals help carriers such as Sprint and Verizon Wireless maximize their networks and tap new subscribers. About 60% of potential customers in the U.S. have mobile service, which is low compared to Europe where market penetration is around 80%.
Virtual network operators such as Amp'd and Virgin Mobile USA have targeted the young, urban and hip, carving out a new client base. These companies often offer prepaid plans without monthly bills, which appeals to younger customers.
Content is another growth engine for the wireless carriers. Ringtones have helped carriers generate more revenue.
Telecoms hope that advanced third generation — or 3g — services such as video will further drive sales and help to justify expensive network upgrades.
The has been significant venture interest in Amp'd since the company was established in January, according to CEO and founder Peter Adderton.
"This is the first privately funded MVNO in the world, so there was an unbelievable level of interest," Adderton said. "This a hot space at the moment and every other MVNO launching is a strategic so they have plenty of cash. If you're private equity money, we're the only game in town."
Adderton says interest was strong enough for Amp'd to consider yet another round of funding this year in anticipation of the huge burn rate to come when its wireless service launches in the fourth quarter.
"We don't need a ton of cash to get going," Adderton said. "They do need a lot of cash once they get going to get customers, so we weren't in a mad panic to raise capital. We took our time and made sure we had the right investors."
The startup's users will be able to select offerings that include video of news, sports, and concerts; music videos; movie and television clips; 3-D games, video Web logs; music downloads, a dating service through HurryDate, as well as ring tones and text messaging.
Amp'd will resell its services on Verizon's network, which already offers its own similar multimedia service, VCast, for $15 a month.
The company plans to use the financing to launch its operations, for content licensing and marketing activities. Amp'd will also increase its staff from 30 employees to 60 this year. Its services will launch with low-end 3G handsets, made by Kyocera, that will retail for roughly $100, according to Adderton. The company has plans to announce other handsets for its service before launch.
http://news.yahoo.com/s/thedeal/20050809/bs_deal_thedeal/ampdcallsup60m;_ylt=Agti6sTuWjGrQy7JYvQcZNYjtBAF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl
The Los Angeles-based startup announced it raised initial financing from Vivendi's Universal Music Group of Los Angeles and three venture capital firms: Highland Capital Partners Inc. of Lexington, Mass.; Columbia Capital of Alexandria, Va.; and Redpoint Ventures of Menlo Park, Calif. Amp'd has also taken on an additional $7 million in debt financing.
With the U.S. wireless industry already fiercely competitive, Amp'd plans on staking out a place for itself by targeting only one demographic — 18-30-year-olds — and then offering a slew of content and services through its phones.
So-called mobile virtual network operators who resell other carriers' services under a different brand name are proliferating in the wireless market. The most prominent of the resale arrangement is Sprint Corp.'s joint venture with the U.K.'s Virgin Group, called Virgin Mobile USA. Telecom newcomers such as 7-11 Inc. and Walt Disney Co.'s ESPN sports network are also launching services.
Resale deals help carriers such as Sprint and Verizon Wireless maximize their networks and tap new subscribers. About 60% of potential customers in the U.S. have mobile service, which is low compared to Europe where market penetration is around 80%.
Virtual network operators such as Amp'd and Virgin Mobile USA have targeted the young, urban and hip, carving out a new client base. These companies often offer prepaid plans without monthly bills, which appeals to younger customers.
Content is another growth engine for the wireless carriers. Ringtones have helped carriers generate more revenue.
Telecoms hope that advanced third generation — or 3g — services such as video will further drive sales and help to justify expensive network upgrades.
The has been significant venture interest in Amp'd since the company was established in January, according to CEO and founder Peter Adderton.
"This is the first privately funded MVNO in the world, so there was an unbelievable level of interest," Adderton said. "This a hot space at the moment and every other MVNO launching is a strategic so they have plenty of cash. If you're private equity money, we're the only game in town."
Adderton says interest was strong enough for Amp'd to consider yet another round of funding this year in anticipation of the huge burn rate to come when its wireless service launches in the fourth quarter.
"We don't need a ton of cash to get going," Adderton said. "They do need a lot of cash once they get going to get customers, so we weren't in a mad panic to raise capital. We took our time and made sure we had the right investors."
The startup's users will be able to select offerings that include video of news, sports, and concerts; music videos; movie and television clips; 3-D games, video Web logs; music downloads, a dating service through HurryDate, as well as ring tones and text messaging.
Amp'd will resell its services on Verizon's network, which already offers its own similar multimedia service, VCast, for $15 a month.
The company plans to use the financing to launch its operations, for content licensing and marketing activities. Amp'd will also increase its staff from 30 employees to 60 this year. Its services will launch with low-end 3G handsets, made by Kyocera, that will retail for roughly $100, according to Adderton. The company has plans to announce other handsets for its service before launch.
http://news.yahoo.com/s/thedeal/20050809/bs_deal_thedeal/ampdcallsup60m;_ylt=Agti6sTuWjGrQy7JYvQcZNYjtBAF;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl
