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Fon raises $14m funding from investors

Alibaba looking to raise $24.3 billion investment before IPO launch

Wifi hotspot provider Fon has attracted $14m in funding from several investors. It would not disclose how much each investor contributed but said that chip maker Qualcomm contributed the largest share of the total. Tech giant Google and European operator group Deutsche Telekom also contributed to the funding, along with venture capital firms Index Ventures, Coral and Atomico.

Fon currently has 12 million wifi hotspots globally. The firm’s service allows consumers with a broadband subscription to join its wifi hotspot network by purchasing one of its routers. The router enables all fellow Fon members to use that wifi connection securely when on the move, and in turn, the subscriber is able to roam on all member hotspots for free.

Fon said that it will use the funding to step up its presence in the US and expand into new geographies. It will also be invested into new product development such as its “Wifi for Business” solution, which is aimed at promoting the concept of social wifi among small and medium business.

Qualcomm made the investment through its venture capital arm, Qualcomm Ventures. Fon revealed that a chipset from Qualcomm Atheros, a subsidiary of Qualcomm, will be used in one of its routers that is currently in development which aims to combine social wifi with social music. The router is expected to be launched in the first half of 2014.

Qualcomm Atheros is also integrating “Fon as a feature” into the software development kit (SDK) for its chipsets. According to Fon, this will make it easier for wifi router manufacturers that use Qualcomm Atheros’ chipsets to integrate Fon’s service into their own routers.

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“The amount of this round and the calibre of investors will propel us into our next stage of growth,” said Martin Varsavsky, CEO at 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.”

Miles Kirby, senior director for Qualcomm Ventures, added that Fon’s approach to crowd-sourcing wifi fits into its plans to increase capacity in mobile networks 1000-fold.

At Qualcomm’s IQ event in Moscow in July last year, former CEO Paul Jacobs explained: “Using small cells, we can offload 15 per cent of the capacity used with just two per cent of the small cells that are currently out there today.”

He also revealed that the firm is exploring supplemental downlink technologies, as there is roughly 35-times more data downloaded than uploaded today, and adding extra downlinks translates into increased capacity.

Fon said that the number of its wifi hotspots increased by 50 per cent in 2013, and claims that in the UK, France and Belgium more than ten per cent of households have a Fon hotspot. The firm expects to reach 35 million hotspots by 2016.


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