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

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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 around a new “social” router called Fonera, which will let people share their WiFi hotspots with Facebook friends and no further authentication — a product that Facebook and Fon plan also to offer to physical stores, which will give users free WiFi when they “like” or check-in to a location.

Qualcomm’s investment is strategic: Fon is building a new, “social-music” router based on a chipset from Qualcomm subsidiary Atheros. Martin Varsavsky, CEO and founder of Fon, tells me that this router will not be ready until May or June of this year. The brand name has not been made public, nor have any other details like music partners.

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 WiFi network.”

Speaking to TechCrunch from Munich, where he appeared on stage at the DLD conference, Varsavsky also said the Fonera product that was launched today acts as a range extender, “so if you have WiFi in your kitchen it will extend out to the rest of home.”

Others in this latest round of funding include existing investors Index Partners, Google, Coral, Atomico and T-Mobile owner Deutsche Telekom (DT). Fon has raised nearly $72 million since being founded in 2006. To date, Fon covers just over 12 million hotspots worldwide, and the aim is to expand that to 35 million by 2016.

The Facebook integration will work to help Facebook and Fon tackle both the enterprise and consumer segments of the market. Among consumers, friends of Fon users will be able to use their friends’ Fon connections when they are in the same physical space as their friends, and using a Fonera router. 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 the enterprise front, the social network will be leveraging the Fon deal to expand its reach in local commerce, by linking up Fon access with Facebook check-ins.

“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.

Varsavsky tells me that this will work similar to the Fonera home product, but will be a separate piece of hardware.

“We’re working on a product for shops, a new type of Fonera for shops that will authenticate in a different way,” he says. “Once you check in or ‘like’ a brand, you connect to WiFi. People come to your shop and promote you in a sense, so we give you WiFi.” He says that this is part of a larger push at Fon to target small and medium enterprises.

Financial terms of the deal have not been disclosed but Varsavsky says that Facebook is not taking an investment in Fon in the process. “We have a business relationship with Facebook and we work with them,” he says.

The U.S. partnerships will not end with Facebook, either. Fon is talking to carriers in the U.S. to roll out as a supplement to their own broadband services. To date, this has been a very fruitful way for Fon to grow. In the UK, it partners with BT, giving BT’s broadband subscribers the ability to access WiFi outside their homes, and 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 collapses.

Fon says that it has 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.”

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