NEW YORK Andreessen Horowitz is leading a $15.5 million round of venture funding for ItsOn Inc, a developer of software that supports more flexible mobile billing options like sponsored data services and split billing for work and personal use.
ItsOn, which has had funding from Verizon Communications, Vodafone Group Plc and Best Buy in the past, said its technology will power a new service for one of the top three U.S. mobile providers starting in early 2013.
Silver Lake AG and SV Angel are also providing funding for ItsOn in the current round but the majority is from Andreessen Horowitz, according to its founder Marc Andreessen. ItsOn was co-founded four years ago by former Cisco Systems Inc executive Charlie Giancarlo and Greg Raleigh, whose company Airgo Networks was bought by Qualcomm Inc in 2006.
ItsOn's offering includes software that is installed on both mobile devices such as smartphones and on remote servers connected to the wireless service provider's network.
The company's idea is that consumers would be able to use the smartphone software to easily make changes in their service plan without having to call customer services.
As consumers use more and more mobile data services on devices such as smartphones and tablet computers, they are increasinly wary of how much they use since U.S. operators Verizon Wireless and AT&T Inc have moved from unlimited use plans and now charge based on how much data customers use.
The ItsOn software also allows the network operator to track data consumption on each device so it can suggest a different service option in cases where a user has a data plan that allows for well above or below the usage, the company said.
Mobile operators typically have a set number of price options they can offer customers as it takes time to introduce a new service plan.
But with the ItsOn system they can offer far more options and allow consumers to change them more easily, according to the company and its backers.
"This is a much more advanced way to do usage based pricing," said Marc Andreessen, noting that carriers now depend on "very crude pricing plans."
For example, ItsOn technology could allow temporary sponsorship of wireless data connections for specific sports events, online shopping or even services like personal email or social network access, its chief executive Greg Raleigh said.
Customers who use the same device for business and pleasure could also get separate bills by using the new software, Raleigh said. Both AT&T and Verizon Wireless have talked about the possibility of offering sponsored data connections but neither has said when such services would be available.
Raleigh declined to comment on which carriers and what types of services his software would support first.
(Reporting by Sinead Carew; Editing by Richard Chang)