Hunter Rosenblume and Rohith Varanasi confess they were obsessed with cell phones from an early age. Rosenblume's bar mitzvah was phone-themed, and Varanasi built voice-over software during his free time in high school.
While those days aren't too distant for the young founders, who are 22 and 19 respectively, that obsession led them to create Lunar Wireless. Their startup is a cell phone carrier that aims to lower the costs of smartphone use by letting customers pay for data per app.
When customers open an app, they're asked if they want to access the program with data or use it offline. If the user opts to use data, the app will be enabled for 24 hours and $.25 is deducted from the user's balance. This system also cuts down on the amount of data apps use in the background to download content like ads.
"Your phone is smart, but you're smarter," Rosenblume says. "There's a better way to pay for data."
Lunar Wireless launched nationwide in early November after the co-founders ran two pilot programs. They said the average American cell-phone bill is about $85 a month on other carriers, but Lunar's customers typically pay around $15. The pair said the highest bill they've ever seen on Lunar was $48.
The co-founders declined to share revenue figures, but said that Lunar has about 1,000 customers. While that's not shabby for a startup, it's got a long way to go before becoming, say, Verizon. Despite the competitive landscape, the young entrepreneurs have lofty dreams of disrupting the telecommunications industry.
Rosenblume and Varanasi, who was born in India, met through mutual friends several years ago. At the time, Rosenblume was using the prize money he earned at hacking competitions to pay his way through college at Georgia Institute of Technology. That is, until Varanasi started beating him at the contests. The pair became fast friends over their love of cell phones and dreams of launching a startup. That goal led Varanasi, who was a high school senior in New Jersey, to drop out and move into Rosenblume's dorm room. "Why Hunter and I work really well together is that we have this grand vision of Lunar being an entry point for everyone to get online," Varanasi says.
As they researched the telecommunications industry, they came across the statistic that about 40 percent of people in Detroit didn't have access to broadband. Rosenblume and Varanasi saw that as an opportunity. They packed their bags -- Rosenblume dropped out of Georgia Tech -- and moved to Detroit in May 2015. Their first task was to learn how the city's inhabitants used cell phone data, so they interviewed more than 1,000 customers at a wireless store. They found that high cell phone bills were plaguing customers and hatched a plan to tackle that problem.
Without the help of major carriers, Rosenblume and Varanasi had to get creative. They bought nearly a thousand phones, linked the devices to many family plans, and installed Lunar's software. Armed with their product, the co-founders tested their software through two pilot programs in the summers of 2015 and 2016.
Between its first and second pilot, Lunar Wireless scored $4.1 million in two rounds of funding. The second round, made up of $3.1 million, was led by Joe Lonsdale's fund 8VC. The startup also partnered with the cell phone carrier BLU Products to sell its $99 flagship phone, the BLU S1. What's more, Lunar's program works on other devices, like the Google Pixel or the Nexus 6.
While these co-founders are just starting their careers as entrepreneurs, they've found a way to balance their professional relationship and friendship: couples therapy. Every week, Rosenblume and Varanasi attend therapy sessions to reflect on the past seven days. Rosenblume says going to therapy with Varanasi keeps him honest with the therapist. "I have done therapy alone, and honestly it's so much better with Ro in the room," Rosenblume says. "He knows every side of my life."
Lunar Wireless may be small, but the co-founders are committed to making it work. "For us, this is something we hold very close to our hearts and we care a lot about," Rosenblume says.