It might be a terrible time to try to raise money, but Peter Adderton, one of the founders of Boost Mobile, doesn’t sound too worried about Mobile X’s prospects.
Mobile X, which is preparing for its commercial launch in September, on Monday announced that it entered into an agreement to merge with Electro-Sensors, a company based in the Minneapolis area that makes industrial sensors.
In connection with the merger, a third-party institutional investor will provide equity financing of up to $20 million. Structured as a reverse triangular merger, the deal will enable Mobile X to grow at a rapid pace, according to Adderton.
Adderton, who still owns the Boost brand in his native Australia, told Fierce that allowing shareholders to come in at an early stage was something that he wanted to do with Mobile X.
He started Mobile X because he was dissatisfied with how regulators handled the T-Mobile/Sprint merger, which not only took the national carrier scene down from four to three (with Dish Network set up to become No. 4), but also brought less competition in the prepaid and MVNO market.
Adderton acknowledged the market today is terrible, but he started Boost in 2001, when Nextel Communications was on the brink of collapse. “I spent a lot of time flying around talking to Nextel bankers,” because at the time, Nextel was considering whether to invest in Boost Mobile or Nextel International.
They elected to put their money into Boost, which remains a strong brand, he said.
“We’re long-term players here” so even though the seas are choppy now, “I think a lot of the great companies are started in these markets,” he said.
New brand coming to town
Consumers are looking for ways to save money, and Mobile X plans to be a disruptive player in the market. The company has launched a beta service and Adderton said he’s been using it now for over a month.
“We’re going to be open, upfront and honest,” he said. “We will say what’s good, what’s bad and what’s ugly. We will look for input because this is a business that was built and designed for the consumer.”
Mobile X announced last year that it struck a deal with Verizon to use its Network as a Service (NaaS) platform. Even though Adderton is a staunch critic of the big nationwide carriers and how they price their services, he had praise for Verizon’s NaaS segment, saying “our carrier partner has been brilliant,” and a very different company than the one he used to know.
Mobile X will have some unique pricing but he stopped short of revealing exactly what that will be. The company has said it plans to use artificial intelligence (AI), machine learning and real-time usage information to learn each customer's unique connectivity requirements and provide optimized individual pricing, supported through an app.
Both iOS and Android devices will be supported but again, details aren’t yet available.
Shares of the combined company are expected to continue to trade on the Nasdaq Capital Market under the ticker symbol "MOBX" upon closing of the merger, which is expected in the third quarter of 2022.