Gigs is a Berlin-based startup that is offering a new twist on an old concept. The company has created what it is calling a telecom-as-a-service platform that will enable companies to offer wireless phone and data plans by using a unified API.
The company caught the attention of some big-name investors and recently raised $20 million in Series A financing led by Gradient, Google’s early-stage fund, with participation from YC Continuity, Crane Venture Partners, Seedinvest, BoxGroup, Uber CEO Dara Khosrowshahi, DoorDash Co-founder and CEO Tony Xu, Instacart CEO Fidji Sim and others.
Although Gigs sounds very similar to what a mobile virtual network enabler (MVNE) does, Hermann Frank, founder and CEO of Gigs, said his company is not an MVNE. The difference, Frank said, is that Gigs is more like a “Stripe” for phone plans because it basically will enable any company to offer a mobile phone service and will be the underlying platform to make it possible for them to create their own wireless service plans and sell them to their customers.
“We want to bring simplicity to telecom services,” Frank said, adding that Gigs will make it possible for companies to develop customizable plans.
For example, Frank said that an HR department could use the Gigs platform to on-board new employees and provision their cell phone account just as they do a laptop. Or a smartwatch maker might want to add connectivity to its devices and charge their customers for a data plan in addition to the device.
But Frank said that Gigs is really targeting deals with other digital technology businesses such as e-Commerce firms that are accustomed to doing most of their business online and are looking for more services to integrate into their offering.
The company is making some traction in the U.S. Frank said it has already negotiated deals with AT&T and T-Mobile and wants to add more operators. He added that the U.S. operators have been great to work with and have given Gigs access to their network services and the flexibility that they want.
Frank said he can’t reveal any customer names, but added that most of the company’s customers are in the U.S. and they include some “large-scale” customers in different vertical markets.
Although Gigs shuns old-school terms like MVNE, the company does plan to make its money in the same way that MVNOs and MVNEs make money, by negotiating wholesale rates at scale with operators and then repackaging the service and reselling it.
But Frank insists that the next-generation of MVNOs will not run into the same problems that MVNOs like ESPN Mobile and Disney Mobile faced 15 years ago. These high-profile failures launched with great excitement but couldn’t attract enough customers fast enough to make any money.
He said that those MVNOs had to spend a lot of money on advertising and marketing, plus they also are were competing heavily with the traditional mobile operators because they had the same product and the same distribution channels. Gigs is different because it enables a scalable rollout for businesses that already have an audience, whether that’s existing users, subscribers or employees. “There’s a natural pool of customers, so we don’t have to spend a dime on acquiring end users,” he said.