A new startup wants to make it easier for any business to sell phone and data plans as part of its own branded mobile network subscriptions – and to help it has secured backing from big-name investors, including Gradient, the venture capital subsidiary of Google. Dara Khosrowshahi, CEO of Ventures and Uber.
Gigs, which was founded in Germany in 2020 and bills itself as the “Stripe for phone plans”, has largely slipped under the radar so far. However, the Berlin-based startup graduated from Y Combinator’s accelerator program last year and secured approximately $4 million in funding (via a convertible loan) ahead of a $20 million Series A round. she is announcing today.
In a nutshell, Gigs allows any business – be it a bank, ride-sharing company or video streaming service – to sell their mobile phone subscription packages (including data, SMS and voice) to their customers. These plans are fully customizable for a specific use case, for example a retail chain may want to launch a full mobile network with its own brand, or a manufacturer of 4G-enabled wearables may want to monetize a data subscription on top of each physical unit they sell. Or, perhaps, a company’s human resources department decided they wanted to ship their own phone plans with their employees’ devices.
These are of course mobile virtual network operators (MVNO), of which there are already many in the world.
In the US, for example, there’s Google Fi which is built on T-Mobile and US Cellular, and Mint Mobile backed by Ryan Reynolds, which is built on T-Mobile’s infrastructure. Elsewhere in the world there’s Aldi Talk – an MVNO powered by German supermarket giant Aldi – which relies on Telefónica’s network in a handful of markets, while the UK has dozens of MVNOs that rent spectrum to the country’s four main operators.
MVNO in a box
But while it is already possible for any company to become an MVNO, it is usually an arduous and time-consuming process, which ultimately offers little flexibility. And that’s where Gigs enters the fray.
Today, any entity wishing to offer phone plans (i.e. become an MVNO) would need to negotiate terms with the major telecommunications providers – in the US these include AT&T, T-Mobile and Verizon – which is not only an expensive process to endure, but requires significant technical work involving network integrations and the need to build user subscription management software.
Gigs, on the other hand, brings together all of the telcos’ APIs (application programming interfaces) into a single, easy-to-access layer, lowering the barrier to entry.
“With Gigs, businesses will be able to offer phone plans in any market they operate in at a significantly lower cost, all through the same integration within two to 14 days,” explained the Gigs CEO. , Hermann Frank, at TechCrunch. “Ultimately, businesses can build their own mobile service that perfectly matches their brand identity at least 20x faster, simpler, and cheaper by leveraging Gigs’ infrastructure.”
Gigs is able to offer this by purchasing large volumes of data, voice and SMS capacity, then distributing this capacity according to the needs of its customers in the markets in which they operate – it is cheaper than if a company had to negotiate prices just for their own needs.
“We can then structure our own plans with our own pricing and create bespoke packages, based on our clients’ needs,” Frank said. “We also have market standard plans that you will find on other carriers, which can simply be resold by our customers at a nice margin.”
While Gigs offers traditional white-label “physical” SIM cards, the emergence of the modern embedded SIM (eSIM) simplifies things by allowing businesses to deliver virtual SIM cards in real time to any number of devices. devices. The latest iPhones don’t even have a physical SIM card slot in the US market, which is why Gigs at least has one eye on a future where it powers digital MVNOs without any physical footprints.
Indeed, the company currently enables eSIM activations by allowing the end user to scan a simple QR code. And by supporting both SIM and eSIM, Gigs can effectively address 100% of the markets it enters.
“The process and hurdles of onboarding with the carrier and being able to sell phone plans, as well as how we provide phone plans, are the same for physical SIM and eSIM,” explained Frank. “[But] eSIM now makes the last step of inserting a physical card into a device obsolete, making the activation process easier.
Along with the core API, the company also offers a software suite called Gigs Connect, which is essentially a hosted checkout “optimized for high end-user conversion,” according to Frank. This payment can be integrated using a simple link pasted into the customer’s product (for example, an online store selling smartwatches).
This is obviously in everyone’s interest – the easier it is for its own customers to sell plans for smartphones, wearables or IoT devices, the more revenue Gigs and its customers can generate.
Separately, Gigs also offers a platform for managing phone plans and device subscriptions for SMBs called Gigs Teams, as well as a dashboard that gives customers a complete view of all subscriptions, payments, and analytics in a single interface.
The philosophy behind it all is much the same as how fintech giant Stripe helps merchants sell online by serving the payment infrastructure through a simple suite of APIs, or even how Amazon Web Services ( AWS) is now the default cloud computing infrastructure for millions of people.
These are undifferentiated heavyweights – allowing businesses to add value to their core product or service without losing sight of their core competencies. For Gigs, that means powering embeddable phone and data plans by eliminating all the complexity that’s typically involved in becoming a global network operator, reducing it to just five API calls, according to Frank.
“Gigs is creating the telecommunications-as-a-service category,” he said. “We’re the first to do what Stripe did for payments or AWS for hosting.”
Last year, the MVNO market was considered a $62 billion industry, a figure that is expected to grow to more than $91 billion within five years. But that’s without considering a new breed of MVNOs that can take hold overnight, so it’s hard to gauge the size of the addressable market. really is.
“Many of the companies in various industries we’ve spoken with have thought about starting their own MVNO, or acquiring an MVNO, often after trying to set something up themselves with carriers for over a year,” said Frank. “In theory, you can easily unlock new revenue streams with an MVNO, but the barriers to entry – lengthy negotiations with carriers, setup costs and very high commitments – have proven insurmountable for most businesses. “
It gets more complicated when a company wants to launch their MVNO in multiple markets globally.
“You will have to overcome the same barriers to entry in each market, which will be a long and very expensive process,” Frank continued. “With Gigs, you can manage all your connectivity needs in all markets through a single integration and start your own MVNO in days.”
It’s also hard to ignore Gigs’ stellar cast of investors. Along with top backer Gradient Ventures and Uber boss Dara Khosrowshahi, YC has reinvested through its follow-on fund YC Continuity, alongside DoorDash CEO Tony Xu, Instacart CEO Fiji Simo and a large number of angel investors from across the tech landscape.
It also helps highlight Gigs’ main target market, which will mostly hover around US companies, although it’s very open for business elsewhere. The company’s core API officially comes out of beta today, and so far it’s been limited to “select partners,” 70% of which are based in the US, 20% in Europe, and 10% in Asia.
It’s also worth noting that, as with almost all startups these days, Gigs is a remote company, with 30% of its workforce based in Germany, 30% in the US, 20% in the UK, and 20% located in a few countries around the world, including Italy, Georgia, Greece, Switzerland and South Africa.
“Most of our team is American – either based in the US or American based in Europe,” Frank explained. “The United States remains the most vital single market for most tech companies, with the most diverse tech scene, and it’s no different for Gigs.”
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