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LotusFlare wants to be the mobile carrier for the future

Sep 01, 2015

Mobile phones and the internet have made the world more connected than ever before. But nearly 4.8 billion people are still without a mobile broadband connection. That’s why companies like Google (goog) are working to bring the internet to rural areas in New Zealand and Sri Lanka, among other areas, using balloons. LotusFlare, a new startup founded by ex-Facebook (fb) engineers, also wants to help make the mobile internet more accessible.

The company said Tuesday it has raised $6 million from Social Capital, the venture capital fund started by former Facebook executive Chamath Palihapitiya. LotusFlare had previously raised seed funding from Google’s venture arm, Google Ventures, and others.

Founded by Sam Gadodia and Terry Guo, LotusFlare wants to be a more modern mobile carrier for developing countries. As Gadodia explained in an interview with Fortune, using mobile apps like Facebook remains expensive for people in some areas.

The company has built an app that lets users see how much data they are using and suggests how they could buy it as cheaply as possible. For example, instead of buying a fixed amount of data, users could buy a week's worth to use apps like SnapChat and Facebook without having to worry about confusing terms like "megabytes."

“The term megabytes should be out of the consumer’s vocabulary,” said Gadodia.

The Statusflare app also includes a way for other app companies to promote data use. Yahoo, for instance, could pay bandwidth costs for people to use its apps or could incentivize them to watch an ad in exchange for more data.

LotusFlare partners with carriers to let them offer these more digestible data plans. It is already conducting trials with carriers in the Philippines.

What LotusFlare is trying to achieve is so interesting that Google tried to acquire the company earlier this year, according to sources who declined to speak on the record.

Palihapitiya said of LotusFlare: "Internet access is quickly becoming a basic human right. The question isn't why but how. LotusFlare represents the next generation of wireless products and services who can bring this to massive populations around the world at increased capability and lower cost."

The startup is also inking deals with Google on democratizing the mobile internet. Google recently embarked on a project with the Sri Lankan government to provide universal Internet access from the search giant’s Project Loon, the company's initiative to use balloons to bring Internet access to unserved parts of the world.

LotusFlare is partnering with Google and local Sri Lankan carriers to help them connect to Google's balloons to provide bandwidth for their own mobile networks.
“In congested urban areas, the demand for bandwidth is increasing faster than capacity,” explained Gadodia. “LotusFlare is helping carriers meet those needs.”

LotusFlare hopes to make money by licensing its proprietary data plans and app to carriers.

Providing mobile access to more people in developing countries could help economically. The World Bank estimates that even just a 10% increase in mobile broadband penetration could drive a 1.4% increase in GDP for low-to-middle income countries.

For more about Google's Project Loon, watch this Fortune video:

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