Meraki Networks Raises $20 Million, Expands Free WiFi in San Francisco, Where Google Failed
Meanwhile, Google’s once-vaunted WiFi initiatives have dwindled down to providing free WiFi only in Mountain View, CA (where Google is headquartered). And Google’s biggest WiFi champion, Chris Sacca, is now gone. Google’s WiFi effort in San Francisco is all but dead, mostly because its partner, Earthlink, decided to get out of the municipal WiFi business.
Meraki’s WiFi routers connect to each other through a mesh network, meaning that many can share a single broadband connection. They are cheap, can be placed outdoors on rooftops and balconies, and can even be solar-powered. The company expects that it will only cost a few million dollars to cover all of San Francisco, compared to the $14 to $17 million estimated for the Earthlink/Google plan. “There is a pretty drastic cost advantage,” says CEO Sanjit Biswas. “Our network will come in at the low, single-digit millions,” he predicts. Meraki will even offer residents free repeaters to amplify the WiFi signal inside their homes, and shoulder the entire cost itself rather than ask for public funds. All the routers will also be on private property, not public property, and thus avoid the politics of involving the city government.
He is not being glib. Meraki’s real business opportunity is overseas with telecom companies in emerging countries like India and Brazil, who desperately want a cheap way to spread broadband and charge for it. Meraki makes a little bit of margin on its hardware (routers go from $49 to $199 each), but the real money is in managing large networks in partnership with telecom companies, where Meraki takes a 20 percent cut of the access fees they charge. The free WiFi in San Francisco might help build some buzz, but it is not going to spread anywhere else—unless those local ads start bringing in some real cash.