Trying to create an upstart hipster cell phone company is utterly expensive. Peter Adderton and Sky Dayton, the CEOs of MVNOs Amp’d Mobile and Helio, know this all too well by now. Amp’d is adding another $107 million in funding, according to PEHub and VentureWire, which will bring the company’s funding to over $360 million.
Helio has the backing of two public companies that are shelling out a lot of money — $440 million — to get it on its feet. Helio says it will reach 100,000 subscribers by the second quarter of this year while Amp’d officially brought in over 100,000 subscribers by the end of 2006. Though this report says they have close to 200,000 by now.
PEHub says Amp’d raised the series E funds from hedge fund Old Lane Management and return backers Columbia Capital, Highland Capital Partners, Redpoint Ventures, Intel Capital, MTV Networks, Tudor Investments and Universal Music Group. The report says that Amp’d is currently considering raising more money.
They’ll probably need it. The economics of MVNOs are really difficult. Amp’d is a private company and doesn’t have to disclose its revenues, but Helio does. Previously SK Telecom said Helio’s losses are expected to reach between $330 million and $360 million in 2007, up from $192 million in 2006. Helio’s sales are expected to jump to $140 million-$170 million this year from $47 million in 2006. Earthlink reported a fourth-quarter net loss of $24.8 million compared to a profit of $29.2 million a year earlier, in part thanks to Helio.
An Amp’d spokesperson says:
Amp’d Mobile was required to post a public document with the SEC regarding its most recent round of funding but has nothing more to say on it at this time. The company will be issuing a press release on its latest subscriber numbers and funding next month.