Truphone Raises $118M to Slice International Long Distance Bills


Truphone, a UK company that strives to eliminate international calling fees, has raised an impressive $118 million round at a $473 million valuation. The investment round was made by a group of investors led by Roman Abramovich, the wealthy Russian owner of Chelsea Football Club. Abramovich’s investment gives him a 23 percent stake in the company.

This is the largest fund yet for the company that was founded in 2006. It has been keeping a low profile since the last time it raised money in 2008. The firm previously raised $57.1 million from Straub Ventures, Burda Digital Ventures, Eden Ventures, Independent News & Media, and Wellington Partners.

Truphone offers international mobile users an alternative to international long distance calling fees. It provides users a local number in all Truphone countries with a single device and SIM card so that users can enjoy services at local rates. The company has iOS and Android apps to enable the same technology on smartphones, with a Blackberry app soon to be released. People calling Truphone customers can do so with a local call to avoid international charges. The company also enables mobile recording that seamlessly records and stores mobile communications in a secure way for regulatory purposes. The service is available in 220 countries and is available as a local service in the UK, USA and Australia.

“Our business is based on a global model, unique in mobile telecoms,” said Steve Robertson, CEO of Truphone. “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.”

The British company will use the financing to launch in the Netherlands, Hong Kong, Poland, Germany and Spain this year, more than doubling its international footprint. It will also increase its staff by adding 500 more employees over the next 18 months.

The company was founded by James Tagg, who developed the touch screens used in ticket machines on London’s tube network. Tagg found a way of making mobile phone calls over the Internet to alleviate poor mobile signals at his home in Kent. Tagg continues to serve as the company’s CTO.

The company has about 400 business customers, including FTSE 100 and Fortune 500 companies in the banking, technology and energy sectors that are seeing ever increasing roaming voice and data costs. In five years time, the company hopes to have a million users.

“I have been a Chelsea supporter since I moved to London in 1981,” Robertson told the Guardian. “If we can make Truphone as successful as Chelsea I will be a very happy guy.”