FON, a company focused on creating a global network of shared Wi-Fi connections, today announced that it has secured $21.7 million in Series A funding from Index Ventures, Google, Sequoia Capital and Skype.
Index Ventures led the round. The company also announced that Danny Rimer (Index Ventures), Mike Volpi (Cisco) Niklas Zennstrom and Janus Friis (Skype) joined the board. Existing board members include Martin Varsavsky, FON CEO, and Antonio Fuentes, FON CFO. This announcement illustrates the willingness of leading technology companies and venture capital firms to jointly invest in the development of a global Wi-Fi infrastructure.
Founded just three months ago by serial entrepreneur Martin Varsavsky, FON's objective is to build a global Wi-Fi network bottom up, with one million hot spots by 2010. To do this, FON users, or "Foneros," are able to connect to the Internet via FON Wi-Fi hotspots provided by other Foneros. For Foneros, the development of the FON global network means they will be able to connect to the Internet safely and securely all around the globe. For service and application providers such as Skype and Google, the FON network makes their services more ubiquitously available. For ISPs, FON provides a way to expand their reach globally. For developers, the FON network is a new platform for creating and delivering services on a global scale.
With a simple download-and-install approach, similar to Skype's, FON is a secure "by-the-people, for-the-people" network. FON has registered 3,000 members since it went live with a beta of its service in November, 2005. The company plans to use its funding to grow the network of Foneros and support the growth of Wi-Fi worldwide, particularly in countries where broadband is currently unaffordable to most people.
FON will drive its revenue from a multi-tiered subscription model. Members sign up in one of three Foneros categories: Linus, Bill or Alien.
• Linus members share their home WiFi hotspot with the FON network and can use any FON hotspot for free.
• Bill members share their WiFi hotspots with Alien members for a fee. Bills cannot roam the FON network for free.
• Alien members pay to use the FON network on an as-needed basis. Fifty-percent of revenue generated from Aliens will be shared with Bills. Alien memberships are currently available on a free-trial basis.
Martin Varsavsky of FON said,
"Aliens are at the heart of our business model. As we continue to grow, we will attract consumers for all three foneros categories and achieve our goal of creating a global WiFi nation. This is a great opportunity for ISP's, bloggers, developers, early adopters, consumer electronics manufacturers and the 'average Joe or Jane' with a WiFi connection to make money by letting other foneros connect to the Net safely and simply."
Skype CEO Niklas Zennstrom added,
"There is perhaps no more important goal for the industry than helping to make broadband Internet access available around the world. FON has a great idea to help people share WiFi with one another to build a global unified broadband network, and we're happy to lend support. Enabling more communities to tap into the power of the Web benefits us all."
Prior to launching FON, Varsavsky, founded the second-largest Spanish Internet company, Ya.com, and the second-largest, publicly-traded telecom company in Spain, JazzTel.com.
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