Skype’s Zennström backs Fon

Venture capital firm Atomico Ventures, the investment vehicle of Skype co-founder Niklas Zennström, has backed Spanish WiFi network Fon in a €10 million (£8.4 million) fundraising.

Fon, which claims to be world’s largest WiFi network, also secured finance from Coral Group and a number of existing investors. The funding will be used to increase services for the growing number of smartphone and tablet users of the network, and expand operations, particularly in the US.

Serial entrepreneur Martin Varsavsky founded the Madrid-based business in 2006, and has raised more than 40 million. Fon’s WiFi network now totals 3.35 million hotspots, increasing more than 200 per cent year-on-year, and the company sold about 1.6 million routers last year contributing to revenues of 28 million, up from 5 million in 2009.

In addition to operating the internet hotspots, the business also builds its WiFi technology directly for telecommunications partners including BT in the UK, MTS-Comstar Russia, SFR France and ZON Cable Portugal.

The deal is the latest in a fresh round of interest in WiFi operators. Last month, BSkyB acquired public WiFi operator business The Cloud, which has 5,000 public locations across the UK, to increase the media giant’s mobile content activities and reach.

Zennström, chief executive of London-headquartered Atomico, comments, ‘Fon has a unique business model using a crowdsourcing approach to provide high-speed internet on the move.’

Nick Britton

Nick Britton

Nick was the Managing Editor for when it was owned by Vitesse Media, before moving on to become Head of Investment Group and Editor at What Investment and thence to Head of Intermediary...

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