By Jennifer LeClaire / CIO Today. Updated January 20, 2014.
You've used the phone but have you used the Fon? Fon is an up-and-coming player in the global WiFi-sharing network space -- and it just raised $14 million through some heavy hitting technology players, including Qualcomm and Google, to push its concept to the masses.
Here's how it works: Fon members share a bit of their home WiFi, and in exchange, get free access at millions of other Fon hotspots worldwide, with no monthly fees. To participate, Fon says all you have to do is buy a Fon WiFi router, called Fonera, and plug it in to your broadband connection.
Alternatively, customers who live in a country where Fon has a telco partner, can sign up with them to become a member.
Chipset maker Qualcomm Inc., through its venture capital arm Qualcomm Ventures, led the latest round of fundraising. The investment underscores its relationship with Fon as a strategic investor. Other investors participating in the round include Index Ventures, Google, Coral, Atomico and Deutsche Telekom.
Fon's management says the company is working hard to develop what it deems a “revolutionary” router that combines social WiFi with social music, based on a chipset from Qualcomm Atheros. Fon expects to roll out the new router in the first half of 2014.
Simultaneously, Qualcomm Atheros is integrating Fon as a feature, available via SDK (software developer kit) for its chipsets, aiming to make it easier for WiFi router manufacturers that use Qualcomm Atheros’ chipsets to integrate Fon.
Fon's website shows Fonera priced in the U.S. at $49. Pricing is not yet available for Fonera for Business, which the website says is coming soon.
Can Fon Succeed?
“The amount of this round and the caliber of investors will propel us into our next stage of growth,” said Martin Varsavsky, CEO of Fon. “By integrating Fon into Qualcomm Atheros’ chipsets, more devices and systems will be automatically equipped to be part of Fon’s global WiFi network.”
Fon has grown 50 percent in the past year and now stands at over 12 million WiFi hotspots. With its crowd-sourced approach of converting existing WiFi hotspots into community hotspots, Fon says it has blanketed entire countries with near-ubiquitous WiFi coverage.
In countries such as the U.K., France and Belgium, for example, more than 10 percent of households have Fon hotspots. Other regions such as Japan and Brazil are catching up. Fon has calculated that it has significant coverage in more than 1,000 major cities, making Fon the world’s largest WiFi operator in municipalities.
We caught up with Jeff Kagan, an independent technology analyst, to get his take on Fon. He told us Fon is a company with a new idea and whether it actually takes off and becomes an important part of the growing industry still remains to be seen.
“Right now it's just an interesting idea with some big name investors behind it,” he said. “The question still remains: Will they make a difference? The vast majority of similar companies never make it long term. Will Fon? We'll have to wait and see.”
“Fon’s unique approach to crowd-sourcing WiFi is going to play an increasingly instrumental role in the future of mobile data,” said Miles Kirby, senior director for Qualcomm Ventures. “Qualcomm is leading the 1000 times mobile data challenge, and Fon fits perfectly into our vision to solving the increasing demand for data.”
Fon often collaborates with leading telcos to reach high levels of penetration in a country. With this approach, Fon has driven success in Europe and Asia, and is now looking to build its footprint by intensifying its focus in the United States.
Fon will use the $14 million to build out its presence in the U.S. as well as expand its reach into new geographies worldwide. It will also fund new product development, including a new Fon router and its newly developed “WiFi for Business,” a WiFi solution for small and medium businesses that is expanding the concept of social WiFi into the business market.
“We expect to reach 35 million WiFi hotspots by 2016,” said Varsavsky. “Our recent expansion in the U.S. and projects such as our work with the Downtown Brooklyn Partnership to provide downtown Brooklyn residents, businesses and public with free WiFi are all a part of the strategy to reach that goal.”