by Phineas Lambert
[Posted on January 23, 2008 - 5:04 PM]
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DiggRoaming wireless services operator United Mobile Liechtenstein AG has completed a $15 million Series A round of funding to increase the reach of its business and roll out new products, it said Wednesday, Jan. 23.
Early-stage venture capital firm Accel Partners of Palo Alto, Calif., best known for its investment in Facebook Inc., and Germany's Grazia Equity GmbH led the round. The pair joined existing angel investors Morten Lund, an initial investor in Skype Technologies SA; Thomas Geitner, the former global chief technology officer of Vodafone Group plc; and Robert Zacconi, CEO of King.com, an online gaming site.
Hussein Kanji, an associate at Accel, declined to give a post-round valuation for United Mobile. He noted that this was the second investment round for United Mobile, which was founded in 2001.
Zurich-based United Mobile, which has about 120,000 subscribers, provides international travelers with a single, global SIM card that offers voice and data roaming. Using a network of 300 companies in 140 countries, the company negotiates rates for outgoing calls and provides free incoming calls in more than 80 countries.
United Mobile will use some of the funding improving marketing and increasing channel coverage, according to Kanji. He added that the funding is also likely to be used for product innovation, including a data roaming product, as well as business development to get the product out to a wider audience.
Kanji said that following the round, United Mobile should be fully funded. In about 12 months it should break even on a cashflow basis, he added. "We're hoping this is the last round of funding. That said, if the business scales up nicely we might bring in another investor," Kanji said.
In perhaps its shrewdest investment, Accel put $13 million into Facebook's first round in April 2005, with reports placing Facebook's valuation at $100 million. Facebook is now valued closer to $15 billion and Accel has yet to exit.
Accel seems to think it will score another hit with United Mobile. "The business potential for United Mobile is quite large," said Kaj Relander, general partner at Accel. "United has the ability to significantly reduce the phone bills of both business and leisure travelers by offering cheaper phone calls abroad, and open up international roaming to millions of prepaid customers worldwide."
In November, Accel announced the final closing of its 10th investment fund of $520 million, bringing its total capital under management to $4 billion.
Kanji said either a trade sale or a public flotation is the likely exit strategy for United Mobile investors.
"The company might be acquired on the strength of its subscriber numbers," Kanji said. "These are valuable subscribers to mobile operators."
As a result of the financing, Accel's Relander is joining the United Mobile board of directors.
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