MADRID, Spain-Google Inc. and Skype Technologies SA are among the backers of Fon, a Spanish Internet software company with plans to create a global network of one million shared Wi-Fi hot spots by 2010.
In its first round of funding, the three-month-old company said it raised $21.7 million from Google, Index Ventures, Sequoia Capital and Skype.
Fon was founded by Martin Varsavsky, a European Internet entrepreneur, and has attracted about 3,000 registered members, which it calls “Foneros,” since it went live with its “by-the-people, for-the-people” service in November.
The company’s basic premise is to enable its users to synchronize access points so they pay for one connection at home and have instant access to a global FON Wi-Fi network. The open platform invites developers to create new technologies, and the design architecture lets Internet service providers expand their global reach, Fon said.
Fon said it plans to drive its revenue from a multi-tiered subscription model, signing up members in one of three categories:
c Linus-members share their home Wi-Fi hotspot with the Fon network and gain access to free roaming throughout the Fon network.
c Bill-members share their Wi-Fi hotspot with Alien members for a fee, but do not benefit from free roaming. Bill subscriptions are not yet available.
c Alien-members pay to connect to the Fon network on an as-needed basis. Fifty-percent of revenues generated from Aliens are to 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.”
The company also announced that Danny Rimer of Index Ventures, Mike Volpi of Cisco and Niklas Zennstrvm of Skype have joined its board. Existing board members include Varsavsky, the company’s chief executive officer, as well as Antonio Fuentes, Fon’s chief financial officer.
Fon will have to overcome a few hurdles, however. First, most ISPs do not allow sharing or reuse of their network connections. Although Fon said it has already worked out a revenue-sharing deal with a European ISP, it will need several more such deals before the service can achieve any kind of global success.
Even with big-name backers, the Fon idea has failed before. In May 2004, San Francisco-based Cometa Networks threw in the towel two years after it began planning a massive Wi-Fi network with funding from IMB Corp., Intel Corp. and AT&T Corp.
