FON, a company focused on creating a global network of shared Wi-Fi connections, has announced that it secured 18 million euros (US$21.7 million) in 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) and Niklas Zennström (Skype) joined the board.
Founded at the end of 2005 by entrepreneur Martin Varsavsky, FON's objective is to build a global Wi-Fi network with one million hot spots by 2010. FON's unique approach is to enable FON users, or "Foneros," to synchronize access points so they pay for one connection at home and have instant access to a global FON Wi-Fi network. This will allow anyone to access their favorite applications, such as Skype or Google Maps, on any device, anywhere, anytime. It provides an extensive network for ISPs to expand their reach globally. Developers will be able to create new technologies based on the open FON platform.
FON is a secure "by-the-people, for-the-people" network. FON has registered 3,000 members since it went live with 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 the masses.
FON will drive its revenue from a multi-tiered subscription model. Members will sign up in one of three Foneros categories: Linus, Bill or Alien.
Linus members share their home WiFi hotspot with the FON network and gain access to free roaming throughout the FON network. Bill members will share their Wi-Fi hotspot with Alien members for a fee. Bills do not benefit from free roaming. Bill subscriptions are not yet available.
The Alien members pay to connect to the FON network on an as-needed basis. Fifty-percent of revenue generated from Aliens will be shared with Bills. Currently, Alien memberships are available on a free-trial basis.
"Aliens are at the heart of our business model," said Varsavsky. "As we continue to grow, we will attract consumers for all three Foneros categories and achieve our goal of creating a global Wi-Fi nation. This is a great opportunity for ISP's, bloggers, developers, early adopters, consumer electronics manufacturers and the 'average Joe' with a Wi-Fi connection to make money by connecting to others worldwide in a safe and simple way."
ISPs are already signing up to partner with FON. "As a leading ISP in Sweden, Glocalnet is happy to partner with FON as the concept will enable us to bring even more value to our offering. Being able to offer Internet access when out of home at no extra cost is a strong selling point," said Martin Tiveus, marketing director of Glocalnet.