This Entrepreneur Started A New Mission-Impacted ISP Through Crowdfunding

The first commercial Internet Service Provider (ISP), The World, was a slow dial-up that gave users a direct connection to the Internet in 1989. The World broke the dam on the ban on commercial ISPs from the National Science Foundation. In 1991, the NSF granted permission to provide public Internet access experimentally.

Today, there are 797,174 global ISP businesses as of 2023, an increase of 5.1% from 2022.

In 2019, a Dutch veteran entrepreneur, Anco Scholte ter Horst, decided it was time to curb the monopoly of giant tech and corporate ISP providers by creating a mission-impacted ISP provider called Freedom Internet.

Scholte ter Horst is the co-founder and CEO of Freedom Internet in the Netherlands.

"As an entrepreneur for the past 20 years, I came more and more to the conclusion that we need to change the way we experience capitalism and go more in the direction of 'what's in it for us' as opposed to 'what's in it for me,'" said Scholte ter Horst. "I'm not against people earning money for their hard work, but besides personal gain, there must be a benefit to society and the world."

Scholte ter Horst confesses that sounds easy, but when he started Freedom Internet in 2020, he had no clue how he would do it. "When I got the opportunity to set up Freedom Internet based on the mission principles beautifully described in a corporate charter, I knew I had to do this."

The company started with a crowdfunding campaign in November 2019 and raised €2.5 million in November 2019. In 2021, they raised another €4 million, and in 2022, in their third fundraising round, they raised 836,000 in a week on the CrowdAboutNow platform. According to Telecom Paper, the company reached its €1.5 million goal by selling 6,000 certificates on the platform CrowdAboutNow. Around 1,000 investors who participated in the round received a share certificate in the company, with proceeds supporting customer growth and potential acquisitions.

Scholte ter Horst says they started with a test batch of 128 customers and moved onwards and connected as many people as fast as possible. "In 2021, our growth was 258%, and in 2022 50%. We expect 50% again in 2023.”

Since 2019, Freedom Internet is already active on KPN, the country's most extensive fiber network, and plans to work with Delta Fiber. Sources from a November 2022 Telecom Paper article noted that a deal with Open Dutch Fiber would make it only the second ISP on that network after T-Mobile.

But Scholte ter Horst says that despite the successful fundraising rounds, one of their biggest challenges always comes back to money and investors.

"If you don't have a single shareholder that just invests, you face a challenge," said Scholte ter Horst. "We were able to finance everything via crowdfunding through three successful rounds, but as a new growing company, we still need support in our cash flow."

"Finding an investor that primarily wants to invest in the impact and not in pure financial gain is difficult," said Scholte ter Horst. "Of course, we need to be a profitable company to invest in innovation, and we have no problem returning dividends to investors, but mission comes first."

Scholte ter Horst says that banks find their company structure difficult. "Our main shareholder is a foundation with veto rights to ensure we stick to the mission. This difference is usual for banks and investors, making it less standard. But I find it enlightening," added Scholte ter Horst.

A mission-impacted ISP

Scholte ter Horst says people want a good, stable and fast working internet connection. "And if something goes wrong, a good working support desk with people that know their stuff.”

For example, Scholte ter Horst says that both Freedom Internet and KPN deliver high-quality internet access.

"However, KPN only delivers internet on their physical network, and we, as independent players in the market, have the luxury to deliver our services on all different networks," said Scholte ter Horst. "Our email services and soon-to-be-released cloud storage service are built with privacy and security in mind, a very different approach in my mind."

Scholte ter Horst says Freedom Internet also plays an active role in the political discussion about End-to-End encryption, blocking access to websites and big tech in schools. "We do this not only in The Netherlands but also in the EU. This active role really sets us apart from KPN."

But Scholte ter Horst strongly believes that more and more people are shifting their interest towards mission-impactful companies.

"We have been growing an economy based on growth and return on investment ideas, and this has brought great and smart ideas to the world, but in the long term, it isn't sustainable," said Scholte ter Horst. "You just can't keep growing forever without sacrificing the basic idea on which you started in your garage. Suddenly we're talking about shareholder value instead of the great fun we had when we started."

"The motivation for starting a company is because you have a great idea that can change something or do something smarter, but not because you want to be rich," said Scholte ter Horst. "More and one people, especially younger people, see the effect that had on the world we live in and approach it differently."

Scholte ter Horst says they see that most customers are very aware of who they are when they choose Freedom Internet.

"We are not the cheapest ISP; customers know this and are prepared to pay something extra for an ISP that focuses on quality, privacy, and security," said Scholte ter Horst. "The effect is that you have a niche market with very loyal customers, which leads to low churn figures."

"Giving a 'come now to us' discount doesn't really work, but loyalty programs do, and this is very different to our competitors in this market," adds Scholte ter Horst.

Scholte ter Horst says they are not alone in the shift towards mission-backed thinking, like Moonback, a steward-owned travel booking company based in the Netherlands.

"Moonback is a great example, they are still small and trying to get the mission going, but the idea is perfect - a booking platform without profit maximization, fully funded by crowdfunding," said Scholte ter Horst.