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Bringing new meaning to the term “good karma,” NYC startup Karma rewards you when you share Internet access from one of its hotspots.

Now, Karma is gearing up to make its hotspots even faster by moving to Sprint’s LTE 4G network. The company launched last year on Clearwire’s 4G WiMax network, which is faster than 3G, but noticeably slower than LTE.

Ostensibly a pay-as-you-go mobile hotspot provider, Karma’s true genius is in the way it lets you rack up free mobile data. After purchasing the Karma hotspot ($99 with 1gigabyte of data, $149 with 7GB, or $279 with 20GB), the company gives you an additional 100MB of data when other people hop onto your hotspot’s network. It’s a smooth way for Karma to bring on more users, and the data consumed by others doesn’t count against your Karma data usage (though it may eat up some bandwidth).

Karma expects to move its service to Sprint’s LTE network “before the weather gets nice” (so, before the summer), chief executive Steven van Wel said in an interview with VentureBeat. Karma will also launch a new LTE-enabled mobile hotspot around that time, which van Wel says will be smarter about hopping off of cellular access when it encounters a known Wi-Fi network. (The current Karma hotspot will continue to function, but not on LTE.)

A year after launching Karma, van Wel tells me, he’s learned that “people are more than willing to pay for data if you give them honest pricing, a simple solution, and [are] incredibly transparent with them.” Karma just hit 50,000 users, and it has given out a total of 10,000 gigabytes worth of free data, he said.

And, for a strange metric, van Wel tells me Karma devices in total have been on for more than 25,000 days. (That’s a sign that its users, though not large in number, are using the devices frequently.)

Karma joins plenty of other startups trying to reshape the mobile industry — chief among them is FreedomPop, a company that offers free mobile service and also runs on Sprint’s network. But while FreedomPop offers everything from voice and texting service, many may find the simplicity of Karma’s offering more appealing.

Karma has raised $1.2 million in funding from TechStars, Amazo CTO Werner Vogels, Collaborative Fund, and others.


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