Smoking hot mobile app Burner raises angel round for continued expansion

Ad Hoc Labs CEO Greg Cohn knew there’d be a market for private phone numbers in an era where people’s cell numbers are increasingly tied to their identity. But he had no idea just how popular Burner, the mobile app that allows users to acquire and discard phone numbers, would become. After launching the startup in August Cohn saw the blogosphere go a little nuts over Burner, with everyone from John Gruber to Tommy Lee tweeting about it.

“It’s been an interesting couple months since we launched,” Cohn said. “And we were definitely pleasantly surprised by how much attention it got.”

Burner app burn cell numbersAd Hoc Labs plans to announce Thursday that it has raised an undisclosed amount of angel funding from a variety of well-known investors, including 500 Startups, David Cohen, Ted Rheingold, Robert Goldberg, Kevin Slavin, Ric Calvillo, and others.

After its initial release, Burner rocketed to one of the top 20 paid apps in the iTunes store, and Cohn said the app has serviced more than 300,000 voice minutes and over 450,000 text messages since its August launch. Cohn, who founded the Los Angeles-based Ad Hoc Labs after four previous startups and a stint running developer platform strategy at Yahoo, said SMS is far more popular than voice with Burner’s users.

Burner, which costs $1.99 to download in the iTunes(s appl) App Store, allows users to make in-app purchases of credits to extend the length, minute, and text capabilities of individual numbers, which are managed through the app and can re-direct callers to a user’s cell phone. Cohn said in-app purchases have comprised the majority of the company’s revenue so far.

“The preliminary data suggests that there’s a real ongoing business to build here,” he said, noting that the new funding would be used for a much-requested Android app and possible third-party partnerships (think Burner numbers up for grabs in other apps.)

Almost as soon as Burner launched, users began coming up with creative uses for disposable phone numbers, including a Craigslist-style personal ad website on Tumblr that is no longer functioning, but which allowed users to post Burner numbers to “connect.” And it’s not hard to imagine that Burner would appeal to the Stringer Bell and his employees, who certainly took advantage of more old school burners.

But Cohn said the company thought long and hard about how to deal with legal issues surrounding an app that’s meant to protect user privacy. It decided that it would protect the privacy between two individual users, but not necessarily between a user and the government or a user and law enforcement. In other words, Burner won’t protect you if you decide to start conducting illegal business on burned numbers.

“So we’re not promising that we’re offering encryption or the opportunity to evade the law,” Cohn said. “We’re very clearly in the user-to user privacy area, and we take that very seriously.”

You can imagine many uses for anonymous phone numbers, from someone having an affair to someone posting a car for sale on Craigslist. But several readers in August wondered what would happen if they burned a number and it was then assigned to someone else — would that person start recieving their calls? Cohn explained that they get their numbers from Twilio, a third party, which quarantines and monitor numbers for activity for a period of two months before they’re assigned. And Cohn pointed out that normal phone numbers are also subject to robo-calling and spamming, so Burner numbers shouldn’t be much different.