Crowdsourced WiFi Network Fon Picks Up $14M Led By Strategic Investor Qualcomm, Adds Facebook Integration

Fon, a free “crowdsourced” WiFi network that is created out of people sharing a portion of their private WiFi connections, is today announcing another $14 million in funding led by Qualcomm Ventures as it gears up to tackle new areas like the U.S. and business users. It will also be teaming up with Facebook in a new partnership that looks like it will help Facebook further its reach with brick-and-mortar businesses: users who check in at a store using Facebook can then access WiFi for free.

Qualcomm’s investment, meanwhile, is strategic: sometime in the first half of 2014, Fon will be shipping a new, “social-music” router, called Fonera, based on a chipset from Qualcomm subsidiary Atheros.

Qualcomm will also be integrating Fon into other Atheros chipsets, making it available as part of the SDK so that third parties using the chipsets will also be able to integrate Fon network access as well.

“The amount of this round and the caliber of investors will propel us into our next stage of growth,” said Martin Varsavsky, CEO, Fon, in a statement. “We are excited about our new relationship with Qualcomm, which is an amazing company and a leader in mobile data communication. By integrating Fon into Qualcomm Atheros’ chipsets, more devices and systems will be automatically equipped to be part of Fon’s global Wi-Fi network.” We hope to be talking more with Vavarsky about this today — he will in any case be providing more details later when he takes the stage at the DLD conference in Munich.

Others in this round include existing investors Index Partners, Google, Coral and Atomico and Deutsche Telekom (DT). Fon has raised nearly $72 million since being founded in 2006.

The investment is part of a big push that Madrid-based Fon, which now has over 12 million hotspots worldwide, is making to tackle new markets.

Along with that, it will be taking a few other steps to make itself more ubiquitous.

First, it will be partnering with Facebook to provide a Fon integration. This will mean that Facebook friends of Fon users will be able to use their friends’ Fon connections when they are in the same physical space as their friends. The advantage of doing this is that you don’t have to give out your password to your own WiFi network, making it easier for people to connect when they are visiting you at home or in your office, and more secure for you in the longer run.

On a more commercial level for Facebook, it looks like the social network will be leveraging its Fon deal to expand its local commerce reach, by linking up Fon access with Facebook’s check-in feature.

“The stores where you can check in and have WiFi is something that would work well for users, and for Facebook, too,” said Cory Ondrejka, director of mobile engineering at Facebook, speaking today at DLD about the relationship. This, in turn, ties Facebook in more closely with a business’ bigger presence online, leading potentially to more advertising and other commerce business from those same retailers.

Fon will also be looking to forge partnerships with carriers in the U.S. to spread its service. To date, this has been a very fruitful way for Fon to grow. In the UK, it parts with BT, giving BT’s broadband subscribers the ability to access WiFi outside their homes, or even to keep using WiFi even when their own connections at home are failing them — I’m a BT subscriber and have had to use the Fon network more than once when my router or my broadband collapse.

Fon says that its grown by 50% this year, and claims 10% penetration in markets like Belgium and the UK.

Perhaps it is that track record, plus the success and market acceptance of other collaborative consumption startups like Airbnb, that have made Fon and its investors more bullish on the prospects of the company repeating that success in the U.S.

“Fon’s unique approach to crowd-sourcing Wi-Fi is going to play an increasingly instrumental role in the future of mobile data,” said Miles Kirby, senior director for Qualcomm Ventures, in a statement. “Fon fits perfectly into our vision to solving the increasing demand for data.”

The third area where Fon will be using its funding is to expand to new demographics, specifically taking its service beyond one aimed at consumers and expanding it to businesses. The Fonera router, for example, will be part of a new “Wi-Fi for Business” product aimed at SMBs.

Fon is projecting that it will be covering some 35 million hotspots by 2016. “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 Wi-Fi are all a part of the strategy to reach that goal,” said Varsavsky in a statement.