Unlockd Taps Smartphone Discounts As Engagement Key

Unlockd, a mobile ad startup that promises to bring down phone bill costs, has raised $12 million in Series A funding.

The startup partners with cellphone companies to push mobile ads to users’ Android phone screen. In return, the subscribing users get a discount on their monthly phone bill, and the mobile carriers make money off of facilitating the service.

“The telco industry is facing a continual decline in ARPUs [average revenue per user], at the same time as growing competition to keep prices low for consumers,” said Unlockd CEO and Cofounder Matt Berriman. “This is due in part to the massive increase in data usage per user, as smartphones become the screen for browsing, playing games and viewing content.” This, as Berriman explained, creates a win-win opportunity for mobile carriers.

Acceptance of an external platform like Unlockd comes against a growing ad-blocking moment, which is now even being supported by mobile carriers. However, providing discounts to users who decide to opt in and sharing revenue with mobile carriers have helped the startup find its place in the ecosystem. The service allows users to “x” out of the ad, if they are uninterested, or lets them click on it to get more details.

Unlockd, which first launched in Australia late last year, partnered with Sprint to expand its presence to the U.S. Under the partnership, subscribing Sprint customers now see ads from companies like Hulu, Lyft and Starbucks on their mobile phone screen and get a $5 discount on their monthly phone bill. The ad sales are reportedly handled by Unlockd itself.

The startup said that it plans on using the fresh funding to fuel its expansion into the United Kingdom and parts of southeast Asia. The latest funding round, which brings total investment in the company to $17 million, was backed by Radek Sali, CEO of Swisse Wellness; Greg Roebuck, CEO of Carsales.com.au; and some of its old investors, including PLC Ventures, Peter Gammell, Sam Mostyn and Lachlan Murdoch, according to TechCrunch.

Under its expansion plan, Unlockd is gearing up for launch in over five international markets by the end of 2016 and is ironing out deals with multiple mobile carriers in each of the proposed markets.

Currently, the startup faces competition in the U.S. market with other companies like Slidejoy, which have a similar discount offering for adopters, except they showcase ads on locked smartphone screens. This, Unlockd argues, is not as effective, as displaying ads on a locked screen doesn’t guarantee that subscribing users are actually seeing them.